Trang Chủ
Development strategy of deposit insurance is in accordance with the new situation
After nearly 25 years of construction and growth, Deposit Insurance of Vietnam (DIV) has gradually developed, well performed its mission of protecting depositors' interests, affirming the correctness of an economic policy, large financial resources, meeting the requirements of an increasingly dynamic market economy and a stronger international integration trend. DIV is one of the representatives of the State in the protection of depositors.
With the current system of compulsory deposit insurance participation for credit institutions that receive deposits, insured depositors will directly benefit from the deposit insurance policy through being reimbursed by DIV (the maximum payment as prescribed by the law) when the insured credit institution is closed and becomes insolvent.
An indispensable mission of DIV is to ensure the safety and sustainable development of the system of credit institutions. Accordingly, the role of deposit insurance activities in the development of the system of credit institutions of each country is shown in many aspects. However, on the most general level, it can be summarized on three aspects, which are: deposit insurance activities contribute to strengthening public confidence in the system of credit institutions; create favorable conditions for the system of credit institutions to develop; and promote savings mobilization for investment in sustainable development.
Given the important role and mission of DIV, it is extremely necessary to develop a development strategy with a medium and long-term vision. The development strategy is like a guideline, which outlines the direction and tasks for each period, contributes to perfecting the deposit insurance policy as well as the operation of the deposit insurance company, thereby better protecting the legitimate rights and interest of depositors, contributing to ensuring the safe and healthy development of banking activities and contributing to the stable socio-economic development.
One of the important tasks of the DIV is: “To develop a strategy for the development of deposit insurance for the State Bank of Vietnam (SBV) to submit to the Prime Minister for approval and implementation”. The birth of the deposit insurance development strategy marked an important turning point - creating the foundation for the development of DIV in particular and the Vietnamese banking system in general, contributing to socio-economic development.
For a unit or an organization, the strategy plays a very important role for the existence and development, guiding that unit or organization in the right direction. After nearly 24 years of operation, having a development strategy is very suitable for the new situation of DIV.
The international and domestic economic context presents many opportunities and challenges for Vietnam's banking industry in general and DIV in particular. Especially, the development trend of the world's deposit insurers requires the deposit insurer to identify future directions to better meet the The International Association of Deposit Insurers (IADI) - Core principles for effective deposit insurance systems.
The deposit insurance development strategy is to orient the DIV to focus its resources, contribute to stabilizing the financial and banking system of Vietnam, and promoting the country's socio-economic development. DIV continues to maintain the goal of the deposit insurance system to protect the legitimate rights and interests of depositors, contribute to maintaining the stability of the system of credit institutions, ensure the safe and healthy development of banking activities.
The deposit insurance development strategy up to 2025, with orientation to 2030 is developed closely and in accordance with the Law on deposit insurance; Law on amending and supplementing the Law on credit institutions (2017); Directive No.06/CT-NHNN (2018); international experiences and Core principles for effective deposit insurance systems (IADI, 2014); Strategy of the banking sector to 2025, with orientation to 2030.
The strategy sets out three overarching goals, including:
Firstly, protect the legitimate rights and interests of depositors, actively contribute to maintaining the stability of the system of credit institutions, ensure the safe and healthy development of banking activities.
Secondly, improve the quality and efficiency of deposit insurance activities including certificate of participation in deposit insurance, reporting information, supervision, examination, participation in special control, early detection and early warning of potential risks for insured institutions; participate in effective restructuring of weak credit institutions; calculate and collect deposit insurance premium, manage capital and investment, communicate deposit insurance policies, and reimburse in accordance with international practices and the provisions of Vietnamese laws.
Thirdly, strengthen the financial capacity of the deposit insurer to affirm the State's commitment and improve depositors' confidence in the deposit insurance policy.
The specific objectives and tasks and solutions in the deposit insurance development strategy are consistent with the tasks stated in the "Project on restructuring the system of credit institutions associated with bad debt resolution for the period of 2021 - 2025" issued by the Prime Minister under Decision No.689/QD-TTg dated june 8, 2022 and the main contents of the Law on deposit insurance approved by the National Assembly on June 18, 2012.
Importance for the development of the banking industry
The deposit insurance development strategy is important not only for deposit insurance activities and the deposit insurance organization but also for the development of the banking industry. Comprehensive development orientations provide a short, medium- and long-term overview of the deposit insurance policy as well as the operation of the deposit insurer. Therefore, the objectives, groups of tasks and solutions presented in this strategy are expected to have a positive impact, helping the DIV to promote its strengths, overcome limitations and bottlenecks in the implementation of the deposit insurance policy, better protect the legitimate rights and interests of depositors, strengthen public confidence in the financial-banking system, and contribute to the stable socio-economic development of our country.
This is also the oriented foundation, the necessary framework solution to strengthen the legal basis, restructure the apparatus, improve the financial capacity and international integration of the DIV, contribute to the effective implementation of tasks specified in the Law on deposit insurance and additional tasks in the new period.
Therefore, the deposit insurance development strategy will help the deposit insurer to develop comprehensively, bring into play its internal resources, take advantage of external opportunities to overcome challenges and fulfill its mission of protecting the legitimate rights and interests of depositors; towards higher standards in ensuring safety and soundness for the operation of the system of credit institutions which are deeply integrated, contributing to macroeconomic stability and sustainable growth.
In order to achieve the stated objectives, DIV needs to gradually innovate in the direction of meeting the principles in Core principles for effective deposit insurance systems of the IADI, in line with the overall orientation of the Banking industry strategyin Vietnam. Simultaneously, the application of modern science and technology and innovation along with the development of high-quality human resources are also key factors for the rapid and sustainable development of the DIV.
Especially, DIV needs to soon develop an action plan to implement the contents of the deposit insurance development strategy in each period to ensure the achievement of oriented objectives according to the roadmaps set out in the Strategy. In case of necessity, advise and propose the SBV to submit to the Prime Minister for decision to adjust the objectives and contents of the deposit insurance development strategy.
In the long term, the DIV need to proactively propose and advise Sate management agencies to improve the legal basis in the direction of enhancing the role of the deposit insurer through early detection and warning of potential risks hidden in the insured institutions; participate in effective restructuring of insured institution. Improving financial capacity to meet higher professional requirements through a series of solutions such as: proposing to increase charter capital, diversifying capital portfolio, supplementing loans from the SBV to affirm the State's commitment and enhance depositors' confidence in the deposit insurance policy.
In addition, the DIV should actively and periodically review and evaluate the suitability and propose to adjust the coverage limit in order to reach the ratio of fully insured depositors out of total depositors at 92% - 95%, ensuring the compliance with international practices. At the same time, study and evaluate the actual conditions of Vietnam and propose an appropriate time to develop and deploy deposit insurance premiums based on assessment and classification of insured institutions.
At the macro level, after summarizing 10 years of implementation of the Law on deposit insurance, it is time to amend and supplement the Law on deposit insurance, the system of guiding documents on the implementation of the Law on deposit insurance as well as perfect the regulations on the deposit insurance regime. This plays a very important role not only for deposit insurance activities but also for completing the legal framework of the financial - banking industry in general.
Communication Department
