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25 years of protecting depositors’ rights
Ms. Phan Thi Thanh Binh, Deputy General Director of DIV, stated that through operations such as remote supervision, examination to ensure compliance with deposit insurance regulations, in-depth examination as directed by the State Bank of Vietnam (SBV), participation in special control boards, insurance reimbursement for depositors, and communication of deposit insurance policies, the DIV has made significant contributions to protecting depositors' rights, ensuring the safety of the credit institution system, and bolstering public confidence in the banking sector.
Ms. Phan Thi Thanh Binh, Deputy General Director of DIV
The DIV has also invested idle temporary funds to enhance financial capacity while ensuring liquidity for insurance payouts and preserving its capital. As of September 30, 2024, DIV’s total assets exceeded VND 120 trillion, with its operational reserve fund surpassing VND 115 trillion. This financial capacity enables the DIV to fulfill its obligations to reimburse when necessary and actively participate in restructuring credit institutions.
Currently, the DIV operates a network with its headquarters in Hanoi and eight branches located in key economic regions nationwide. This structure ensures the effective implementation of deposit insurance policies to protect depositors and contribute to the safety of the credit institution system. Furthermore, the DIV emphasizes the development of a high-quality workforce, the application of modern technology, and innovative activities to build a modern deposit insurance organization aligned with international practices.
Additionally, raising public awareness of deposit insurance policies has been actively conducted, targeting various audiences, including insured institutions and depositors, to foster an accurate understanding of deposit insurance policies and strengthen public trust in the banking system.
"After 25 years of establishment and development, we have laid a strong foundation for fulfilling our assigned duties and are prepared to undertake tasks in the new development phase," emphasized the DIV leadership.
Mr. Nguyen Quoc Hung, Vice Chairman and Secretary General of the Vietnam Banks Association
In recognition of the DIV’s role, Mr. Nguyen Quoc Hung, Vice Chairman and Secretary General of the Vietnam Banks Association acknowledged the DIV's significant role in safeguarding depositors' rights and maintaining the stability and healthy development of the banking system, especially during the restructuring of credit institutions.
He highlighted the DIV’s key operations, including issuing deposit insurance participation certificates, examination, fee collection management, and participation in special control of insured institutions. These activities ensure the safety of insured institutions from inception through market exit. In the event of liquidity issues or bankruptcy, the DIV reimburses depositors in accordance with legal regulations.
Meanwhile, deposit insurance certificates, displayed at the transaction counters of insured institutions, act as "certificates of trust," allowing depositors to identify and choose these institutions for their deposits confidently.
The Law on Credit Institutions 2024 has reinforced the DIV’s role in restructuring weak credit institutions, particularly in early intervention measures for the People's Credit Funds system.
"Over 25 years, the DIV has continually affirmed its role in protecting depositors' legitimate rights and ensuring the safety of the credit institution system," Mr. Hung affirmed.
Ms. Pham Thi Giang Thu, Chairwoman of the Vietnam Center for Investment and Trade Arbitration
Ms. Pham Thi Giang Thu, Chairwoman of the Vietnam Center for Investment and Trade Arbitration, highlighted the global prioritization of deposit insurance organizations during financial crises to protect depositors’ rights. This approach stabilizes banking systems facing insolvency and boosts public trust.
Citing the example of the Federal Deposit Insurance Corporation (FDIC) in the U.S., Ms. Thu noted the FDIC’s effective interventions in managing the bankruptcies of major banks such as Silicon Valley Bank, First Republic Bank, and Signature Bank in 2023. The U.S. government, in coordination with the Treasury Department, Federal Reserve, and FDIC, swiftly implemented measures to protect depositors and mitigate financial instability risks.
Moving Forward
In its new phase of development, the DIV has been entrusted with additional responsibilities by the Government and the SBV under the Development Strategy for Deposit Insurance to 2025, with orientations to 2030 and the Law on Credit Institutions 2024. This new mandate provides an opportunity for the DIV to enhance its role and responsibilities further while requiring substantial reforms and efficiency improvements across its operations.
Despite its accomplishments, the DIV recognizes existing limitations and challenges that must be addressed to better fulfill its duties in the future.
Ms. Phan Thi Thanh Binh acknowledged that the Law on Deposit Insurance, which has been in place for over a decade, has shown inadequacies in addressing the current realities of Vietnam’s banking sector and aligning with international deposit insurance practices. The issuance of the Law on Credit Institutions 2024 introduces new responsibilities for the DIV, necessitating amendments to the Law on Deposit Insurance to implement these new duties effectively, protect depositors more comprehensively, and support the restructuring of the banking system as outlined in the Development Strategy for Deposit Insurance.
Echoing this sentiment, Mr. Nguyen Quoc Hung stressed the importance of amendments to the Law on Deposit Insurance that clearly define the DIV’s supervision and examination roles to assess risks and provide early warnings for credit institutions with potential issues, minimizing latent risks and protecting depositors more effectively. He also emphasized the need for regulations enabling the DIV to intervene early based on Vietnam's practical realities and international experiences.
Ms. Pham Thi Giang Thu highlighted the critical importance of the DIV’s new responsibilities outlined in the Development Strategy for Deposit Insurance and the Law on Credit Institutions 2024. She emphasized the necessity of revising the Law on Deposit Insurance to incorporate global and domestic experiences, address operational challenges, and meet future demands.
Discussing the DIV’s future development plans, Ms. Phan Thi Thanh Binh noted that the Law on Credit Institutions 2024 includes many provisions related to the DIV’s functions and tasks. Therefore, the DIV will proactively collaborate with the SBV to draft a revised Law on Deposit Insurance aligned with Vietnam’s realities and international practices. The aim is to ensure the law can adapt to emerging trends and maintain its effectiveness over an extended period.
While the DIV's financial capacity has improved significantly in recent years, it remains modest relative to the total insured deposits and total assets of the banking system. "Therefore, the DIV is planning and proposing measures to enhance its financial capacity further, enabling more effective participation in the restructuring of credit institutions," Ms. Binh added.
Recognizing the rapid growth of the banking system and the emergence of new responsibilities, the DIV is committed to enhancing workforce training, promoting digital transformation, applying advanced technologies, and fostering innovation to develop high-quality personnel. These efforts will ensure the DIV keeps pace with the evolving banking sector.
The DIV also plans to increase the effectiveness of its public communication on deposit insurance policies by leveraging traditional media, such as radio and television, in conjunction with social media platforms, to broaden public awareness and understanding of deposit insurance.
Communication Department
