Trang Chủ
This assertion was made by Dr. Dao Minh Tu, First Deputy Governor of the State Bank of Vietnam (SBV), in an interview with the editorial board of the DIV’s website regarding the organization’s performance in recent years.
Could you please share how the banking sector's reform and national economic development have influenced the establishment and development of deposit insurance in Vietnam?
Deputy Governor Dao Minh Tu: In 1997, the enactment of the Law on the State Bank of Vietnam (SBV) and the Law on Credit Institutions provided a fundamental legal foundation for the banking system to continue its robust growth, aligning with the socialist-oriented market economy and meeting international integration demands. Vietnam’s cooperative relationships with international financial institutions such as the International Monetary Fund (IMF), World Bank (WB), and Asian Development Bank (ADB) were also re-established and strengthened.
During this period, the Asian financial crisis of 1997 severely impacted the global economy. Although Vietnam’s banking system was not directly affected due to its limited integration with international financial markets, it still faced various risks. Domestically, the collapse of numerous credit cooperatives severely undermined public confidence in credit institutions. In response, and in line with commitments to international financial organizations to adopt market-based economic management tools, the SBV advocated for the establishment of a state-owned organization to safeguard depositors' interests and restore public trust in credit institutions.
In June 1999, the SBV formed a preparatory committee comprising key leaders from its functional units to establish the deposit insurance organization. By September 1999, in collaboration with relevant ministries and agencies, the SBV submitted a proposal to the government, leading to the issuance of Decree No. 89/1999/ND-CP on deposit insurance, which laid the legal foundation for deposit insurance policy in Vietnam.
Subsequently, in November 1999, the Prime Minister signed Decision No. 218/1999/QD-TTg, establishing the DIV, the country's first financial institution dedicated to implementing deposit insurance policies aimed at protecting depositors' legitimate rights and interests. This marked a significant milestone in the modernization and international integration of Vietnam's banking system.
Following its establishment, under the close guidance of the SBV and with coordinated support from the Ministry of Finance, the DIV promptly disbursed insurance payments to depositors at dissolved grassroots people's credit funds, helping to stabilize social order and security in affected localities.
Over the past 25 years, alongside the continuous development of Vietnam’s banking system, the DIV has made great efforts to implement deposit insurance policies, safeguard depositors’ legitimate rights and interests, and contribute significantly to maintaining the stability and fostering the safe, sound, and sustainable development of Vietnam’s credit institutions.
The DIV has proactively provided advisory support to the SBV and relevant agencies in drafting and amending legal documents, creating a legal framework that enhances the effectiveness of deposit insurance policies while aligning with international practices and Vietnam’s realities.
From its initial legal framework established by Government Decree No. 89/1999/ND-CP, the DIV has actively collaborated with SBV units, ministries, and sectors to draft and submit legislation to the Government and the National Assembly. This led to the enactment of the Law on Deposit Insurance No. 06/2012/QH13 by the 13th National Assembly in 2012, providing the highest legal foundation for deposit insurance activities in Vietnam. Additionally, the DIV has contributed to the amendments and supplements of the Law on Credit Institutions on multiple occasions, further improving the legal framework for credit institutions’ operations. Most recently, the 2024 amended Law on Credit Institutions incorporated provisions that define the functions and duties of the deposit insurance organization, granting the DIV greater authority and responsibility to participate more deeply and effectively in the restructuring of credit institutions.
In addition to contributing to legal framework improvements, the DIV has advised the SBV and proposed that the Prime Minister adjust the deposit insurance coverage limit in line with different periods—an essential tool for protecting depositors. Over the past 25 years, the coverage limit per depositor at each insured institution has been adjusted three times, increasing from VND 30 million (1999–2004) to VND 125 million since 2021. As of September 30, 2024, the coverage limit of VND 125 million fully protects 92.36% of insured depositors in Vietnam, aligning with international standards.
How do you assess the DIV’s contributions to achieving its mission of protecting depositors’ rights and ensuring the safe and stable development of the credit institution system?
Deputy Governor Dao Minh Tu: As the banking system has grown, the number of insured institutions and depositors has rapidly increased. Currently, the DIV protects nearly VND 8.9 trillion in deposits from approximately 124 million depositors across 1,278 insured institutions.
The DIV’s supervisory activities have played a crucial role in monitoring the operations of credit institutions. Its supervision reports and examination conclusions regarding insured institutions have provided valuable information to the SBV for assessing the operational quality of credit institutions.
Moreover, the DIV has begun participating in the restructuring of weak credit institutions by monitoring and assigning personnel to the special control boards of people's credit funds under special control. It collaborates with SBV provincial branches to propose resolution measures and participates in managing these credit funds, including pilot programs where DIV personnel take on management and executive roles at credit funds under special control.
The DIV has also actively promoted public awareness of banking policies, particularly deposit insurance, using diverse and effective communication methods. This has enhanced public understanding and confidence in deposit insurance and Vietnam's financial and banking system.
How would you evaluate the DIV’s financial capacity and operational capabilities?
Deputy Governor Dao Minh Tu: After 25 years of operation, the DIV now has a network comprising its headquarters and eight regional branches in key economic zones nationwide, supported by a well-trained workforce. From its initial capital of VND 1 trillion, the DIV’s total assets have grown to over VND 120 trillion, including a professional reserve fund of more than VND 115 trillion. This financial capacity is essential for the DIV to fulfill its mandates, promptly reimburse when needed, and effectively contribute to the restructuring of credit institutions.
In addition to implementing domestic deposit insurance policies, the DIV has established and strengthened international cooperation with deposit insurance organizations worldwide, hosted numerous international conferences on deposit insurance in Vietnam, and enhanced its status within the global deposit insurance community.
With its achievements over the past 25 years, the DIV has proven to be an effective tool in reinforcing depositors’ confidence and maintaining the safe, sound, and sustainable development of Vietnam’s credit institution system, earning high praise from the SBV and other governmental bodies.
Given the opportunities and challenges of the new development phase, what are the key requirements and directions for the DIV in the coming period?
Deputy Governor Dao Minh Tu: As Vietnam enters a new stage of national construction, protection, renewal, and international integration, the banking sector, including the DIV, faces higher demands and more complex challenges. As a State-owned financial institution tasked with protecting depositors' legitimate rights and interests and supporting the safe, sound, and sustainable development of credit institutions, the DIV must continue to build on the achievements of the past 25 years.
Moving forward, the DIV should clearly identify its advantages, opportunities, existing limitations, challenges, and obstacles to develop appropriate strategies and solutions for sustainable and efficient growth. This will enable the DIV to contribute more actively to the overall development of the banking sector and the country, with an immediate focus on fulfilling the objectives and tasks outlined in the DIV’s Development Strategy until 2025, with orientations toward 2030, approved by the Prime Minister. Key priorities include:
- Legal Framework Enhancement: Collaborate closely with SBV units to draft and submit proposed amendments to the Law on Deposit Insurance to the Government and National Assembly in 2025. This aims to ensure consistency with the 2024 amended Law on Credit Institutions and strengthen the legal foundation for the DIV to enhance its financial capacity and improve its effectiveness in supervision, examination, and credit institution restructuring.
- Operational Efficiency and International Best Practices: Enhance operational efficiency and modernize deposit insurance practices in line with international standards. Proactively propose solutions to the SBV for the DIV to participate more effectively in credit institution restructuring, including early intervention, strengthening its role in special control boards, and assigning personnel to manage and operate specially controlled people's credit funds.
- Financial Capacity Development: Explore effective solutions to strengthen financial capacity, diversify investment portfolios, and accumulate financial resources to support deposit payouts and credit institution restructuring.
- Organizational Optimization: Streamline the organizational structure for greater efficiency, focusing on workforce training and development to ensure a well-structured, sufficient, and high-quality human resource pool that meets the new requirements.
- Digital Transformation and International Cooperation: Accelerate digital transformation, apply modern science and technology, and foster innovation. Continue expanding cooperation with regional and international deposit insurance organizations to enhance operational capacity and international integration.
Communication Department (Translation)
