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Bank deposits increased sharply
Data from the State Bank of Vietnam (SBV) shows that residential deposits in May 2022 continued to increase by 36,889 billion VND compared to April, reaching 5.56 million VND. Compared to the end of 2021, people's deposits increased by 5.07%, equivalent to an increase of more than 268,.480 billion VND.
Notably, the payment deposit balance of individual customers has increased continuously for 8 consecutive quarters. By the end of the first quarter of 2022, the balance of personal payment deposits in the banking system reached 1.04 million billion VND, an increase of 11% compared to the beginning of the year and 40% higher than the same period in 2021 .
This shows that idle cash flow from the population has been strongly invested in the banking system, and credit institutions have continuously increased deposit rates. Looking back at the first 6 months of the year, deposit interest rates have increased by an average of 0.5-1 percentage point for a term of 6-12 months compared to the end of 2021.
In addition, the explosion of payment technology and promotions of banks are the factors that have impulsed demand deposits to grow rapidly in recent years.
People's deposits continuously increased in the first months of this year partly due to the gloom of other investment channels such as securities or real estate. In addition, credit institutions also increased deposit interest rates to a high level with attractive incentives to draw money back to the system.
E-payments and e-banking services have become popular before COVID-19. However, under the impact of the pandemic, e-banking services and the trend of cashless payment continued to explode and strongly develop. According to the results of Visa's latest survey on consumer payment attitudes, 65% of Vietnamese consumers carry less cash in their wallets and 32% said they will stop using cash after the epidemic. Meanwhile, nearly 76% of current consumers use e-wallets and the percentage of card users is even higher at 82%.
Besides opening online accounts and experiencing convenient services on banking applications, online savings services are attracting more and more consumers. The driving force behind the application of these services comes from the convenience, when depositors can make transactions at any time without having to go to the banks.
Deposits are protected by deposit insurance policy
Currently, many people are familiar with Deposit Insurance of Vietnam (DIV) - the State financial institution that was established in 1999 and came into operation on July 7, 2000. This is the only organization assigned to implement the deposit insurance policy to protect the legitimate rights and interests of depositors, support credit institutions in difficulty, and control and prevent risks in banking activities.
With the assigned functions and tasks, the DIV has carried out on-site examination as planned for the institutions participating in the deposit insurance system, implemented the examination under the direction of the Governor of the SBV, and carried out off-site supervision for 100% of the organizations participating in the deposit insurance system. When detecting problems as well as risks and weaknesses, the DIV will report to the SBV for correction and handling. As a result, since 2015, there has been no failure or bankruptcy of the institutions participating in the deposit insurance system. The banking system operates stably and safely without major systemic risks. Therefore, the depositor's interests are completely guaranteed.
DIV has reached a technical agreement with the functional units of the State Bank of Vietnam (SBV) on the proposed contents such as supplementing some rights and obligations of the deposit insurance participating organizations and the deposit insurance; operational capital; revenue; investment portfolio; issuing and revoking the Certificate of participation in deposit insurance; insured deposits, uninsured deposits; time limit for first-time complaint settlement..., and at the same time give specific opinions on 5 proposed contents in the proposal to build the Law amending and supplementing a number of articles of the Law on Deposit Insurance such as: Completing regulations on deposit insurance premium; Improve the financial and operational capacity of the deposit insurance; Supplementing the rights and obligations of the DIV; Completing the legal regulations for the DIV to participate more deeply in the process of restructuring weak credit institutions; Completing regulations of the time when the insurance payment obligation arises to ensure timely and effective payout. This is the main key task in the orientation and implementation of the important tasks of the DIV.
As of June 30, 2022, the total capital of the DIV has reached more than 88.8 trillion VND, an increase of 8.7% over the same period in 2021. The professional reserve fund is 82.6 trillion VND. With such financial resources, the DIV can effectively participate in the process of restructuring weak credit institutions and at the same time ensure the interests of depositors. DIV is protecting more than 89 million depositors with insured deposits of nearly 7 million billion VND at 1283 participating institutions.
Article 18, Law on Deposit Insurance stipulates that: “Insured deposits are deposits in Vietnamese Dong of individuals with insured institutions in the forms of time deposits, demand deposits, savings accounts, certificates of deposits, bills, notes and other types of deposits as stipulated in the Law on credit institutions, except the deposits stipulated in Article 19 of this Law.”
Thus, deposits in VND at institutions participating in the deposit insurance that accept deposits from individuals are announced, including checkable deposits (demand deposits) and online savings (online savings deposits), except in the case of deposits of uninsured subjects as follows:
- Deposits at credit institutions of individuals who own more than 5% of the chartered capital of such credit institutions.
- Deposits at credit institutions of individuals who are members of the Board of Directors, members of the Supervisory Board, General Director (Director), Deputy General Director (Deputy Director) of that credit institution; deposits at foreign bank branches by individuals who are the General Director (Director), Deputy General Director (Deputy Director) of that foreign bank branch.
- Money that buys anonymous valuable papers issued by the institutions participating in the deposit insurance.
In addition, it should be noted that deposits other than VND, mandatory savings deposits as prescribed by microfinance institutions, and deposits not possessed to individuals are not insured.
