Trang Chủ
Ms. Nguyen Thi Hong - Member of the Party’s Central Committee, Secretary of the Party’s Designated Representation, Governor of the State Bank speaking at the Conference
Gradually affirming the role, accomplishing the organizational structure and operating mechanism, and improving the financial and professional capacity
In the world, deposit guarantees play a role as a member of the national financial safety net, taking a crucial part in ensuring the safety of the banking and financial system. We can see this role in recent developments, especially in 2022 when a number of American banks such as Silicon Valley Bank, First Republic Bank, Signature Bank and Credit Suisse - the second largest bank in Switzerland, closed down and went bankrupt.
The DIV was established in the transitional period of the national economy, while the banking system was still in its early stage with potential risks. With the mission of protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of the credit institution system, the DIV has gradually affirmed its role and improved its organizational structure, operating mechanism, and enhanced its financial and professional capacity. Resources have been accumulated over the past 25 years with a professional reserve fund reaching over VND 115,000 billion by the end of 2023, providing the DIV with a basic financial resource to perform its tasks.
The core operations have been implemented by the DIV in accordance with regulations. The supervision reports of the DIV are of good quality; the examination of the compliance of people's credit funds with monetary and banking regulations for according to the plan assigned by the SBV in the recent time has also proven its effectiveness through detecting some disadvantages in a couple of credit institutions. This is recognized to be an objective information channel, helping the SBV in managing the system of credit institutions and people's credit funds. In particular, the DIV has recently assigned 80 officers to participate in 37 special control boards at people's credit funds to actively participate in the process of resolving weak people's credit funds.
On behalf of the Party's Designated Representation and the SBV's Management Board, I would like to warmly commend and acknowledge the achievements that generations of leaders and employees of the DIV have made over the past 25 years.
Amending the Law on Deposit Insurance, contributes more positively to the innovation, development and integration of the banking industry
On behalf of the Party's Designated Representation and the SBV's Management Board, on the occasion of the 25th anniversary of the DIV, I would like to suggest some issues for the DIV to consider and focus on in the coming time:
Firstly, the Party’s Designated Representation discussed and issued a Resolution approving the policy of building the amendment of the Law on Deposit Insurance. Recently, the SBV has advised the Government to submit to the National Assembly for promulgation of the Law on Anti-Money Laundering, the Law on Credit Institutions 2024, and in the near future, the amended Law on Deposit Insurance.
The process of researching and developing the Law often involves a large amount of work, requiring timely progress and ensuring the quality of the Law. The Law on Deposit Insurance regulates the activities of the DIV in relevance with other laws such as the Law on Credit Institutions. Therefore, the DIV needs to focus its resources on in-depth researches on international practices, summarize and evaluate the characteristics and peculiarities of Vietnam in order to have specific proposals to authorized authorities, and include them in the Draft of the amended Law on Deposit Insurance submitted to the National Assembly.
I would like to emphasize that the current context with the unpredictable and complex world economy, the rapidly developing technology, the strongly emerging fintech companies, etc., brings about not only advantages but also new difficulties and challenges. Vietnam has a very open economy, thus fluctuations in the world economic environment will immediately affect the economy, currency and the operations of Vietnamese credit institutions. We have witnessed a couple of American banks such as First Republic Bank, although operating well, making profits for 52 consecutive quarters, but collapsed due to the impact of many factors. The new context has posed a risk of bank runs to not only banks with weak management but also banks that are operating well when encountering objective incidents. Therefore, the Law on Credit Institutions 2024 has drawn lessons from those practical cases to have preventive and prompt solutions. The tasks and challenges of the DIV in the coming period are extremely important. This is an opportunity for us to propose and advise on the amended Law on Deposit Insurance, summarizing the experiences of the world and Vietnam, overcoming the dangers and limitations in the activities of deposit insurance and meeting the requirements and solving problems that may arise in the new period. Focusing on improving the legal basis via amending the Law on Deposit Insurance is the most important issue.
Second, the DIV needs to continue to promote its achievements in the recent time to effectively perform the functions and tasks assigned according to the provisions of existing law. This is a premise for the DIV to be ready to take on new tasks for the goal of ensuring the safe operations of the credit institution system and socio-economic development of the country. The DIV should actively and proactively coordinate with the units, departments and provincial branches of the SBV through the process of supervision and examination of credit institutions and participate in special control of people's credit funds to have more consultation for the draft of the new Law on Deposit Insurance. The closer the coordination, the more effective the implementation of tasks.
Third, the DIV needs to actively focus its resources to promote the training activities, gradually building a quality human resource to meet the requirements of tasks in the new period. With the operating mechanism in the model of a wholy state-owned enterprise, the DIV has certain favorable conditions in terms of recruitment, training and salary mechanism, so the DIV should promote this advantage to build a source of competent staff to serve the assigned activities and tasks.
To facilitate the DIV's activities, we hope that the Party Committee of National-level State-Owned Enterprise' Group and central agencies, ministries will continue to support the activities of the DIV, and continue to accompany the SBV to assist and closely direct its activities of deposit insurance, especially in the process of developing the Law on Deposit Insurance. We request that the departments and agencies of the SBV coordinate and discuss with the DIV to advise on the Draft Law on Deposit Insurance in accordance with the new situation.
In the context of global integration, the scale of operations of the credit institution system in Vietnam is increasing with the total deposits amounting to more than VND 14,000 trillion, the total assets of the entire system to about VND 18,000 trillion. The size of each credit institution is also getting bigger, the nature of banking and financial operations is increasingly complex, posing many challenges for the banking industry. The role of the DIV therefore is increasingly important and facing many challenges.
To make DIV's contribution to successfully complete the assigned political tasks of the banking sector, I request that the leaders and employees of the DIV continue to promote the spirit of solidarity and determination, promote the tradition of DIV's previous generations to strive to successfully complete the tasks entrusted by the National Assembly, the Government and the banking sector. In the near future, it is necessary to focus on completing the goals and roadmap set out in the Development Strategic Plan for Deposit Insurance through 2025, with a vision towards 2030, and conduct researches to advise on the development of the amended Law on Deposit Insurance , gradually turning the DIV into a modern financial institution, approaching international practices, suitable to Vietnam's conditions, contributing more actively to the innovation, development, and integration of the banking sector, contributing to the socio-economic development of the country.
The SBV's Party Committee of National-level State-Owned Enterprises' Group and Management Board believes that with the achievements and traditions gained over the past 25 years, together with the courage, intelligence and spirit of solidarity, innovation and creativity in the new era of the generation of leaders and employees, the DIV will strongly develop in the coming period, completing its mission as a state financial institution protecting the rights and legitimate interests of millions of depositors, contributing significantly to strengthen the confidence of depositors and promoting the safe, healthy and sustainable development of the system of credit institutions in Vietnam.
Finally, on behalf of the SBV's Party Committee of National-level State-Owned Enterprises' Group and Management Board, I would like to send my best wishes to the leaders of the central ministries and agencies, distinguished delegates, and leaders, officers and employees of all generations of the DIV with good health, happiness and success. I wish the DIV to quickly achieve its goal of becoming a modern deposit insurance, in line with international practices, and effectively participating in the restructuring of the banking system.
Department of Research and International Cooperation (translation)
