Trang Chủ
In the late 90s of the twentieth century, Asia entered a serious economic crisis. In the process of international economic integration, Vietnam cannot help but suffer certain impacts, affecting the economy in general and the financial system in particular. DIV was established on November 9, 1999 and officially came into operation in 2000. Immediately after going into operation, in the process of consolidating the organization, the young deposit insurance organizations have participated in handling the collapsed people's credit funds, paid out to depositors, thereby reassuring people's psychology, contributing to maintaining order of security and social safety in many localities.
DIV is the only deposit insurance organization in Vietnam, operating under the model of a one-member limited liability company with 100% charter capital held by the State. From the initial capital of 1,000 billion dong, by the end of September 2022, the total assets of the the deposit insurer reached more than 92 trillion dong, of which the professional reserve fund reached nearly 86 trillion dong. DIV has built a deposit insurance network with its head office in Hanoi and 8 branches in key economic regions of the country in order to closely follow the development of credit institutions. Currently, the DIV is protecting deposits of depositors at 1,283 participating institutions, including 97 banks and foreign bank branches, 1,181 people's credit funds, 01 cooperative bank and 04 microfinance institutions.
Well perform the mission of the deposit insurer
Over the past 23 years, the DIV has always strived to fulfill its mission of organizing the implementation of policies to protect depositors' interests. Accordingly, the DIV is one of the representatives of the State in the protection of depositors. With the current compulsory deposit insurance mechanism, insured depositors will directly benefit from the deposit insurance policy through their insurance payment by the DIV (the coverage limit as prescribed by law) when the insured institution is closed and becomes insolvent.
The payment of insured deposits at the terminated insured institutions has the most obvious effect on strengthening depositors' confidence in the banking system. During the initial period of operation, the DIV reimbursed depositors at 39 people's credit funds in 11 provinces and cities for 1,793 insured people with the total amount of 26.78 billion VND.
Although the payment amount is not much, thanks to that, there has not been the phenomenon of depositors withdrawing money at other deposit mobilization institutions due to the influence of the closed PCFs. That has shown that the deposit insurance policy in Vietnam in the past time has ensured the interests of the majority of depositors, especially low-income depositors. Depositors are protected actively, reflecting in not only paying all insured deposits but controlling to the maximum extent, ie deposit insurance activities aim at protecting depositors and also creating a mechanism to motivate depositors to have a sense of self-protection. With a certain insurance payout (coverage limit), it is required that depositors pay more attention to the operation of credit institutions to choose to deposit at credit institutions with low risk when in balance with a certain interest rate.
The active depositor protection role is also performed by the deposit insurer's hedging activities against the activities of insured institutions. These are warning activities according to the results of supervision, examination and financial support activities to recover the operation of problematic credit institutions.
An indispensable mission of DIV is to ensure the safety and sustainable development of the credit institution system. Accordingly, the role of deposit insurance activities in the development of the credit institution system 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 credit institution system; Create favorable conditions for the credit institution system to develop; and promote savings mobilization for investment in sustainable development.
It can be said that, from the time of coming into operation until now, along with protecting the legitimate rights and interests of depositors, DIV has also performed an important role for the system of credit institutions, specifically:
Firstly, the activities of the DIV contribute to the consolidation and enhancement of the prestige of the credit institutions.
The DIV is responsible to the Government for the supervision and examination of the observance of the law on deposit insurance and safety in the operation of the insured institutions. DIV effectively uses two main methods to supervise insured institutions, namely off-site supervision and on-site examination.
Over the past 23 years, the deposit insurer's offsite supervision has been conducted on a regular basis for 100% of insured institution and is considered an important channel for assessing the potential risks of insured institutions, thereby giving early warning and proposing measures to help them overcome and prevent. The supervisory criteria of the DIV are built on the basis of the general evaluation criteria system of the SBV, in line with international standards on the operation of credit institutions. On the basis of reported information sources, DIV conducts analysis and assessment of the operation situation of each insured institution, detecting units that violate regulations on deposit insurance as well as regulations on safety in operation of credit institutions.
Offsite supervision is also the basis for conducting on-site examination by pointing out units with errors or weak performance that need to be checked. The deposit insurer's on-site examination plays an important role in the insured depository institution's supervisory program. On-site examination is to assess the status of the insured institution.
Offsite supervision and on-site examination of the DIV have become an important channel of information and assessment, along with the inspection and supervision of the SBV, to provide objective judgments on the status of operations and compliance with laws of insured institutions, especially the PCF system. The analysis and assessment of the DIV through supervision and examination has helped the insured organizations to properly recognize the deviations in operation, thereby raising the sense of responsibility in complying with the provisions of the law on deposit insurance and safety criteria in the operation of credit institutions. The role of the DIV in protecting the interests of depositors and the stability of the system of credit institutions is partly due to the impact of examination and supervision activities.
The resolution of insured institutions from examination, supervision and warning to reimbursement of insured deposits has contributed to helping weakly performing credit institutions recover or withdraw from the business field in an orderly manner, without affecting the chain of other credit institutions as well as depositors' psychology; and contribute to strengthening customers' trust in credit institutions, shaping and correcting the operation of credit institutions, especially the system of people's credit funds and joint-stock commercial banks, making the system of credit institutions operate stably and effectively. .
Secondly, the DIV contributes to strengthening the organization and operation of credit institutions, which is a supporting tool for the renewal and restructuring of the system of credit institutions and strengthens the State control over the activities of credit institutions.
With the operating motto of taking revenue from the majority to handle risks for the few, over the past time, DIV’s activities have created favorable conditions for credit institutions with limited operating scale and unable to solve problems and continue to operate. That activity of the DIV has contributed to promoting the process of restructuring credit institutions in Vietnam, which is being actively implemented.
In particular, with limited State budget capital, the contribution of credit institutions to the deposit insurance fund to solve the difficulties of credit institutions that cannot continue to operate is an effective solution, especially in the context of Vietnam. Credit institutions that must terminate their operation will be quickly settled by DIV to pay the insured depositors. With the simple and timely reimbursement mechanism implemented by DIV in recent years, it has created conditions for credit institutions to terminate operations if necessary and does not adversely affect other credit institutions and depositors.
Despite the not long period of operating time, the deposit insurer has increasingly affirmed its role and position and has become an indispensable financial institution in the market economy in our country.
Further promote the role of the DIV
The deposit insurance policy has exerted positive effects, stimulating elements of the market economy, ensuring a healthy environment for the operation of credit institutions, mobilizing internal resources for socio-economic development and stability. However, in order to carry out new and increasingly advanced tasks in the direction of international integration, there are issues that need to be studied in order to make the deposit insurance policy more and more appropriate and complete.
Firstly, it is necessary to quickly put into practice the deposit insurance development strategy to 2025, with an orientation to 2030 in relation to the strategy and development orientation of the banking and financial system. Currently, the financial and banking industries have long-term development orientations and strategies. In order to fulfill its role as a safety tool for the sustainable development of the national banking and financial system, it is imperative to put into practice the deposit insurance development strategy in sync with the orientation, development strategy of the two main branches of finance and banking. Therefore, the promulgation and implementation of the Strategy for deposit insurance development to 2025, with orientation to 2030 is of great importance, as the basis for strengthening deposit insurance activities in the future, meeting the requirements of internationalization of the Vietnamese banking and financial system.
Secondly, it is urgent to upgrade and perfect the legal framework for deposit insurance activities. Only in this way can we ensure that the issues related to deposit insurance activities are at the same level as other issues. First of all, it is necessary to soon amend and supplement the Law on Deposit Insurance so that the deposit insurance policy can be effective and the deposit insurance organization well perform its functions and tasks in the process of integration, to best meet the requirements of economic and society development in a new period, which is intense competition and increased risks.
Thirdly, ensure that the DIV has sufficient capacity to implement the deposit insurance policy, depositor protection policy, and the development environment for credit institutions. At the time of establishment, the DIV was funded by the State Budget with a charter capital of VND 1,000 billion and by 2015 was supplemented with a charter capital of VND 5,000 billion from the self-accumulated capital of the DIV. In the current context, the charter capital of DIV needs to be increased to match the growth trend in the size of the system of credit institutions and the growth of insured deposits, as well as in line with the orientation of the banking industry, which requires banks to increase their charter capital to meet the capital requirements of Basel II standards. The increase of charter capital for DIV will ensure the financial capacity of the deposit insurer, affirming the commitment of the State and improve depositors' confidence in the deposit insurance policy.
Thus, in the recent period, the DIV has played an active role in concretizing and implementing the State's major policies and guidelines in the field of finance and banking, and actively protecting the interests of depositors, creating a favorable environment for the activities of deposit insurance participating organizations, participating in macro-currency control activities.
With the youth of a financial institution at the age of 23, in order to succeed, besides the direction and support of relevant agencies, the decisive factor is the solidarity and high determination of the whole deposit insurance system. We believe that, DIV will firmly step on a new journey, develop strongly, actively contribute to the restructuring of the system of credit institutions, which is worthy of the trust of millions of depositors.
