Trang Chủ
According to the government agencies, the PCF system has affirmed the role and position of a new cooperative economic model in the monetary and credit field and made effective contributions to agricultural and rural economic development in Vietnam. Until now, the majority of PCFs have safely and effectively operated, actively provided their members with funds for production and business activities to improve living standards and facilitate poverty alleviation in rural areas.
However, during its operation, the PCF system has exposed several weaknesses, inadequacies and potential risks that may affect systemic stability such as: inadequate human resources (HR) not meeting the requirements; the risk control mechanism is unsuitable for the characteristics of PCFs; many PCFs' deviation from their principles and organizational objectives of providing assistance and support to members in their business and life improvement to pursue profits, mobilize large deposits, and provide loans to projects requiring large capital leading to high credit risks and even involving in fabricating documents to borrow money, causing significant losses.
In order to improve the PCF system's quality and organizational and operational safety, the Government and the State Bank of Vietnam (SBV) have issued many mechanisms and policies and taken measures to rectify the underperformed and high-risk PCFs' operation and strengthen supervision and inspection over these PCFs. These solutions have contributed to enhancing and improving efficiency in maintaining and ensuring the entire PCF system’s safety.
As the organization responsible for implementing deposit insurance policy in Vietnam, DIV has actively performed professional operations and especially strengthened supervision and examination over PCFs, participating in the resolution of troubled PCFs. The objectives of these operations are to promptly detect inadequacies and violations, subsequently warn those PCFs and request for solutions from the SBV to appropriately resolve encountered problems and ensure the safe and sustainable development of the PCF system.
Accordingly, the DIV has performed supervision and inspection over public institutions (including PCFs) since the DIV's establishment. The DIV has examined public institutions on a planned basis, conducted examinations at many public institutions under the direction of the SBV's Governor, and performed the off-site supervision of 100% of public institutions.
The supervision has concentrated on the analysis and assessment of the PCFs' operational situation; their compliance with deposit insurance regulations as well as their compliance with regulations on banking operations' safe practices; thereby properly warning PCFs about their risks, violations and inadequacies that need to be rectified and requesting prompt solutions from the SBV to ensure the safety and soundness of the entire system.
On-site examinations have emphasized on PCFs' compliance with deposit insurance regulations; announcing deposits; accounting and management of deposit accounts in order to successfully detect PCFs' violations in fund mobilization, proposes appropriate solutions to the SBV to protect depositors as well as prevent frauds and profiteering from the Deposit Insurance Fund.
Especially, recently when the number of troubled PCFs (underperformed and high-risk ones) have suddenly increased and many of those have been put under special control by the SBV due to their seriousness violations, the DIV has actively conducted in-depth examination and supervision in order to update information on the PCFs' operations and to grasp the status and fluctuations of deposits, especially eligible deposits, thereby taking appropriate solutions or reporting to the relevant agencies for corrective measures .
Practical evidence proves that recent supervision and examination activities have helped the DIV discover many violations in corporate governance; internal control; capital mobilization; cash collection and payment; documents and records management; and deposit insurance premium assessment and payment. For every case, the DIV has clearly identified the cause to propose for solutions and rectification measures and make recommendations on appropriate mechanisms and policies for the PCF system, enabling PCFs to have a safe and sustainable development. Some examples are the proposals on a capital support mechanism for PCFs facing liquidity difficulties; on supplementing, amending and completing mechanisms and policies to facilitate the creation of a safe legal corridor for the PCF system's operation (such as amending regulations on legal capital levels; promulgating regulations on the management and tracking of import and export of valued blank tax documents, cash collection and payment procedures, and unified savings deposit mobilization at the PCFs, etc.).
For troubled PCFs, with its assigned functions and tasks, DIV has actively coordinated with the SBV's provincial/city branches in the participation in the process of monitoring, examining and resolving the mentioned PCFs , especially those that have high failure risks and may incur deposit insurance reimbursement. specifically, the DIV has assigned staff to participate in the special control process at the request of the SBV; assisted the SBV branches in formulating and implementing plans and schemes to strengthen and rectify the PCFs placed under special control to restore their operation to normal levels, which. in turn, has limited the adverse impacts on the other PCFs' operation in the area and prevented social and security disturbance in the region. For those PCFs that require legal entity resolution, the DIV has actively joined with the SBV provincial/city branches to develop resolution plans upon the SBV's request; proactively review deposit records to make public depositors lists with the estimated pay-out amounts as a basis for formulating reimbursement plans; develop a public awareness plan at every PCF; make all necessary preparations to be ready for reimbursement in accordance with the law and the directions and guidance of the SBV.
Furthermore, in order to have comprehensive direction, supervision, inspection and resolution on a regular basis as well as proactive and prompt responses to risks at problematic PCFs, in 2015 the DIV established a Steering Committee at the DIV Head Office and Steering Groups at DIV's local branches. structured, the Steering Committee has studied and issued many guiding documents on supervision, in-depth examination, participation in special control as well as provided close instructions to solve difficulties and arising problems encountered by DIV's staff during the special control process, contributed to the consolidation , rectification and resolution of PCFs.
In addition to the above professional operations, public awareness activities on deposit insurance policy is also the DIV's focus with the aim to help depositors thoroughly understand their rights and can rest assured over their depositing money at public institutions for reinvestment in economic development, contributes to the enhancement of capital mobilization capability, which could meet PCF members' reasonable borrowing demands. As depositors at PCFs often have limited ability to collect enough information on finance, banking and deposit insurance, the DIV has regularly conducted research to innovate and implement a wide range of communication channels to depositors at PCFs. Additionally, the DIV has also developed effective public awareness scenarios appropriate for each time period, helping to strengthen and enhance depositors' confidence.
In order to enable the PCF system to develop in the right direction and in a stable, safe and effective manner, experts believe that it is necessary to continue to improve the PCF system's legal basis, mechanisms and policies. For PCFs, it is crucial for them to improve internal regulations on governance, control, administration, credit activities, accounting, budgeting, control, internal audit and assess possible risks in every professional procedure so that they can have appropriate preventive and corrective measures when violations occur.
