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Where there are depositors, there is deposit insurance
The day of November 9, 1999 entered the history of banking operations with Decision No.218/1999/QD-TTg dated November 9, 1999 of the Prime Minister - marking the appearance of a specialized organization to implement deposit insurance policies in Vietnam - Deposit Insurance of Vietnam (DIV); which demonstrates the State's commitment to protecting the legal rights of depositors and ensuring social security.
During the first years of operation, DIV had to resolve a series of People's Credit Funds in Kien Giang. The first place DIV came to reimburse was Rach Soi People's Credit Fund. According to the recollections of Mr. Nguyen Van San - Former Head of the Preparatory Committee to establish DIV (1999-2000), Former Chairman of the Board of Directors of Vietnam Life Insurance Company (2000-2001), at that time people's psychology was very unstable and worried because of their hardness -earned savings are at risk of being lost. When the State Bank of Vietnam decided to handle the situation and DIV accepted over the insurance payment, depositors were very excited. “Local people gradually stabilized their mentality and felt more and more secured. The commune, district, and provincial authorities also highly recognized the positive impacts of DIV’s resolution of PCFs in the area. A new organization in operation has handled it smoothly and achieved good results, which is a great success for the staff, demonstrating the effectiveness of the deposit insurance policy" - Mr. Nguyen Van San recalled...
Today, with the stature of a State-owned financial institution operating not for profit to implement deposit insurance policy, DIV has gradually grown with the banking system, insuring about 99 million depositors at nearly 1,300 credit institutions.
With fast and stable growth in financial resources, from the initial VND 1,000 billion granted, by September 30, 2023, total assets of DIV reached more than VND 106 trillion, the operational reserve fund reached more than VND 99 trillion. DIV can ensure timely payments to depositors and is ready to participate more deeply and effectively in the process of restructuring credit institutions.
Always placing depositors in a central position, deposit insurance operations aim to better protect their interests. If a credit institution operates safely and healthily, then people's deposits will be safe. Deposit insurance operations such as issuing certificates of participation in deposit insurance, examination, supervision, management of deposit insurance premium, and participation in special control of credit institutions... .are deployed synchronously by DIV on the basis of closely following the "life cycle " of credit institutions from establishment - operation - withdrawal from the market. In particular, in recent years, DIV has also participated in in-depth examination of PCFs to support the inspection and supervision function of the State Bank of Vietnam (SBV), thereby contributing to healthy operations of this type of credit. Cooperative applications are mainly distributed in rural areas, associated with the agricultural economy and small businesses.
With an operating network spread evenly across key economic regions of the country, it can be seen that where there are credit institutions, where there are depositors - there is DIV to ensure that deposit insurance policies come to life. Deposit insurance is no longer strange but is increasingly associated with banking services in people's daily lives. At the transaction counters of credit institutions, it is easy to see the "imprint" of deposit insurance with the certificate that a credit institution has participated in deposit insurance displayed in an eye-catching position. Or savings books, certificates of deposit appear more and more often with the words: Customer deposits are announced by DIV. This shows that deposit insurance is increasingly practical for depositors and is a "certificate of trust" for credit institutions.
When talking about deposit insurance, it is not just about compensation and payment in case of failure. People now understand that depositing money at a credit institution that has participated in deposit insurance means placing themselves in official banking activities protected by the Government, instead of "black credit". State management agencies and lawmakers also realize the need to upgrade the position of deposit insurance, especially after the recent collapse of many large banks in the world. A new mechanism for deposit insurance organizations to participate earlier in the early intervention process of credit institutions is being placed on the agenda of the National Assembly.
Although since 2015, our country's credit institutions have operated relatively stably, market confidence has been maintained, and the deposit insurance fund has not had to pay depositors, but DIV still regularly researches and focuses on simulated payment scenarios to be ready to protect the legitimate rights and interests of depositors when necessary.
Understand the depositors well
Banking is a special type of monetary business, a means of attracting capital, investing and creating opportunities for businesses and individuals to develop their business, creating economic growth and prosperity for society. However, banking activities are strongly influenced by an abstract factor, which is trust. On the other hand, it is easy to see that the operating capital of Vietnamese credit institutions is mainly mobilized from the population. Without a deposit insurance mechanism, when a credit institution encounters problems, people depositing money in that credit institution may have to suffer economic consequences, accompanied by many complex social problems. In a volatile and unpredictable world like today, people will hold on to idle money and not dare to put it into the economic flow through credit institutions if they are not sure that the money will produce money safely.
Protecting depositors and contributing to ensuring the safe and healthy development of banking operations against risks is the starting point and operational goal of the deposit insurance organization. Protecting depositors is also a vital factor to ensure the existence and sustainable development of credit institutions.
In the Deposit insurance development strategy to 2025, with orientations to 2030, the specific are all aimed at deposit goals: Strive for the ratio of fully insured depositors out of the total number of insured depositors to reach 92% - 95%, ensuring compliance with international practices; Strive to shorten the actual payment time from 30 working days by 2025 and 15 working days by 2030, to help depositors have early access to their money; Strive to achieve the goal that by 2025, 45% and by 2030, 55% of depositors will grasp the core contents of deposit insurance policy.
To realize this, it is essential to perfect the institution, like changing a new shirt for the narrow regulations that hinder the advancement of deposit insurance activities. At the same time, there needs to be a mechanism to strengthen financial resources for the deposit insurance organization. Practice shows that deposit insurance organizations cannot effectively prevent risks when financial potential is too modest compared to the capital scale of public credit institutions. In particular, human "capital" is a key factor that determines the operational efficiency of DIV. Working as a deposit insurer means being "exposed" to the risks of depositors and the risks of credit institutions. Therefore, deposit insurance officers must be even more trusted: solid skills - clear mind - professional style.
Over the past 24 years, the core values that create the identity of DIV have been deepened by millions of generations of dedicated deposit insurance officers. But it is also full of challenges because the financial market is increasingly presenting many new risks.
The Deposit insurance development strategy approved by the Prime Minister at the end of 2022 opens a new era for deposit insurance activities in Vietnam. Therefore, 2023 is considered a pivotal year, a memorable "slice" in many milestones of DIV's maturity in its efforts to implement the Strategy.
The vision is clear, the path forward is clear, the mission of the deposit insurance is to create a breakthrough in deposit insurance activities, continuing to write the golden pages in the new development period of such a State financial institution as the only specialized agency that protects depositors on behalf of the Government, making practical contributions to the growth of the national financial system.
Communication Department
