Trang Chủ
Gradually participate more strongly in the process of restructuring credit institutions
The issue of increasing the role of the deposit insurer in preventing and handling failures has not only been raised recently but has been a throughout policy, thoroughly and unanimously understood by senior leaders. of the National Assembly, the Government, and the State Bank of Vietnam (SBV).
The Law amending and supplementing a number of articles of the Law on Credit Institutions in 2017 stipulates that DIV participates in the special control process; participate in evaluating and implementing plans to restore weak credit institutions; make special loans to specially controlled credit institutions; buy long-term bonds of credit institutions to support specially controlled credit institutions; participate in management and liquidation of assets at credit institutions according to the provisions of law.
In the Banking Industry Development Strategy to 2025, with a vision to 2030, the Prime Minister clearly stated the need to amend the Law on Deposit Insurance in the period of 2021 to 2025, in order to further enhance the role of DIV, create favorable conditions for for DIV to participate more deeply in the restructuring process of credit institutions. Recently, the Deposit Insurance Development Strategy to 2025, with orientation to 2030, approved by the Prime Minister on December 30, 2022, clearly defines one of the perspectives and orientations for the field of deposit insurance in Vietnam is to strengthen the role of DIV in the process of participating in restructuring weak insured institutions associated with bad debt handling.
The project to strengthen and develop the PCF system to 2020, with a vision to 2030 issued by the Governor of the SBV also proposes solutions to strengthen the role and coordination of the DIV in handling and participating in supporting cases of weak PCFs placed under special control.
Under the Directive of the Governor of the SBV, conclusions of SBV leaders at conferences on restructuring always raise the issue that DIV needs to actively participate in this process, first of all supporting the recovery process of credit institutions that have problems, especially PCFs. Therefore, in 2022, the Governor of the SBV has issued a document directing DIV to be ready to coordinate with the SBV branches in provinces and cities to send personnel who meet the standards and conditions specified in Circular No.21/2019/ TT-NHNN dated November 14, 2019 amended and supplemented a number of articles of circulars regulating cooperative banks, PCFs and PCF system safety assurance funds to appoint Chairman and Director of PCFs under special control. In addition, the Governor requested the DIV to develop internal regulations on appointing personnel to ensure standards and conditions for appointing personnel to hold key positions at the specially controlled PCF at the request of the SBV provincial and city branches.
It can be seen that the issuance of temporary regulations by the DIV on appointing personnel to hold the positions of Chairman of the Board of Directors and Director of the PCF under special control is a next step in using resources of the supporting DIV to support for the recovery of PCFs facing problems has been deployed recently.
Tools to ensure the operation of credit institutions encountering problems
In fact, the process of restructuring credit institutions shows that in some cases, leaders of specially controlled PCFs have violated the law, been prosecuted by investigation agencies, detained or have fled from local where the PCF is having problems, causing a rift in trust for depositors. Now there is a lack of people holding key positions and a lack of legal representatives, making the process of building a recovery plan and implementing it difficult. This project is even more difficult.
Clause 1, Article 37 of the Law on Credit Institutions stipulates that: “The SBV has the right to suspend or temporarily suspend the exercise of rights and obligations of the Chairman, members of the Board of Directors, Council of Members, and Heads of members of the Supervisory Board and executives of credit institutions violate the provisions of Article 34 of this Law and other relevant laws during the implementation process; request the competent authority to dismiss, elect, appoint a replacement or appoint a replacement if deemed necessary.” This is the legal basis for the SBV to intervene early, appoint personnel to play key leadership roles of credit institutions with problems, thereby creating conditions for PCFs to return to normal operations and limit the risk of falling into financial difficulties. into insolvency or bankruptcy.
Accordingly, the SBV has the right to appoint replacements to hold the positions of Chairman and members of the Board of Directors, the Board of Members, the Head and members of the Supervisory Board, and the PCF executives are given special control in case of necessity. Personnel appointed to hold this position must ensure the conditions and standards specified in Article 20 of Circular No.04/2015/TTNHNN dated March 31, 2015 of the Governor of the SBV regulating PCFs and Circulars No. 21/2019/TT-NHNN dated November 14, 2019 of the Governor of the SBV amending and supplementing a number of articles of circulars regulating cooperative banks, PCFs and funds to ensure the safety of the PCF system .
In order to implement the direction of the SBV, the temporary regulation on appointing personnel to hold the positions of Chairman of the Board of Directors and Director of specially controlled PCFs issued together with Decision No.375/ Decision-BHTG dated June 30, 2023 of the Board of Directors of DIV has specifically stipulated the scope of adjustment and principles for appointing personnel; subjects, conditions, standards of nominated personnel; form, authority, time limit, process for appointing personnel as well as reporting regime of appointed personnel during the performance of tasks. In addition, this regulation determines salary, bonus, welfare and other policies for appointed personnel; evaluate, rank, emulate, reward, arrange and arrange appointed personnel after completing tasks.
According to this temporary Regulation, after receiving a request from the SBV to send personnel, DIV will issue an implementation policy. The DIV regional branch has a corresponding PCF located in the assigned area and authorized management to review personnel to meet all conditions and standards; Discuss and agree on the selection of expected personnel and discuss with the expected personnel about new work requirements and subjects eligible for nomination consideration are employees holding leadership positions at the Branch, including: Director, Deputy Director, Department Head, Deputy Department Head. The DIV Branch reports to the General Director and submits to the Board of Directors of DIV for approval of the personnel expected to be appointed. After approval by the Board of Directors, DIV will report to the SBV on the appointment of personnel to perform the required tasks. On that basis, the SBV considers and decides to appoint personnel of the DIV to hold the position of Chairman of the Board of Directors or Director of PCF under special control.
Previously, based on the provisions of the Law on Deposit Insurance and the Law on Credit Institutions, DIV sent officers to participate in Special Control Boards at the request of the SBV. However, the Special Control Board of credit institutions only has tasks and powers within the scope of monitoring and controlling the financial situation and operations of credit institutions, reporting and recommending the SBV to implement appropriate intervention measures. The Special Control Board plays the role of representative of the banking industry management agency at problematic credit institutions, but cannot directly intervene, direct, and handle specific activities of credit institutions. By sending personnel to participate in the management and operation of credit institutions facing problems, the SBV has more tools to implement normal operations of credit institutions in accordance with the provisions of law as well as facilitate the construction and implementation. recovery plan after approval.
Promulgation of the temporary Regulation - opportunities and challenges for the DIV
This is the first time that the DIV has issued internal regulations related to this specific field of activities. Therefore, the implementation of the above-mentioned temporary regulation first means piloting a new professional activity, which needs to go through an implementation process, and at the same time summarize, learn from experience and perfect it in order to serving the process of drafting and promulgating official documents. In addition, by sending personnel to participate in the administration and management of specially controlled PCFs, DIV staff will have the opportunity to practice their personal qualities and abilities, and directly participate in the actual activities of PCF, thereby acquiring useful knowledge and experience for professional activities such as examination, supervision, participation in special control... of DIV in the future.
However, the temporary regulation was drafted and issued as a pilot step, so there are still shortcomings and inadequacies that cannot be resolved within the scope of functions and powers of DIV.
First of all, currently, the appointment of personnel is carried out based on the request of the SBV and in accordance with the provisions of labor law and other relevant laws. In Vietnam, the practice of deposit insurers appointing officials to hold the positions of Chairman of the Board of Directors and Director of PCFs under special control has no specific, complete, and consistent regulations at the Law and Decree, Circular level on internal regulations of the organization. Thus, the DIV has issued a temporary regulation that is only effective within the organization, but there is no mechanism, or procedure for inter-sectoral and inter-agency coordination in sending personnel from all levels. Therefore, it is necessary to build a system of mechanisms and policies to create clear corridors for the implementation of this special field of operations.
Secondly, the appointment of personnel to participate in the administration and operation of specially controlled PCFs is being carried out with three related parties: SBV requests, DIV proposes personnel, and SBV reviews and appoints appropriate personnel to hold the position of Chairman of the Board of Directors or Director of PCF. Thus, the employment relationship of the above personnel is unclear. This employee has a labor contract with DIV, but was sent according to a decision of the SBV, to perform tasks assigned by the SBV, to work at a third unit, the PCF. This can affect policies related to employees as well as policies on training, improving qualifications, salary scales, social insurance, determining planning subjects for leadership positions, management in the future... For example, during the time the staff of the DIV is appointed by the SBV to hold leadership positions at the PCF, he or she will no longer perform duties at the DIV, therefore cannot account for salary, bonus, and welfare benefits at DIV according to regulations.
Thirdly, the salary, bonus, and emulation and reward mechanisms for officials appointed to hold administrative and executive positions at the People's Credit Union are having problems and need to be maintained no lower than before to ensure the preferential treatment regime and benefits of officials as well as social insurance and health insurance regimes, through which, officials who accept new tasks can work with peace of mind. However, DIV is a State-owned financial institution operating under the model of a one-member limited liability company with 100% capital held by the state. The salary, bonus, and policy regimes of DIV for employees must comply with current regulations of Laws, Decree and Circulars issued by the SBV, Ministry of Finance, Ministry of Labor, War Invalids and Social Affairs. There are currently no regulations on salaries, bonuses, or policies for personnel appointed to hold administrative and executive positions at specially controlled credit institutions. The current financial mechanism does not allow the DIV to build budget estimates and salary funds in accordance with the task requirements of officials assigned to manage and operate the PCF. Therefore, in parallel with the process of perfecting the legal basis, determining the financial mechanism to serve this activity is extremely important and needs to be regulated in legal documents.
Fourthly, credit institutions are placed under special control, which means they are facing serious problems that cannot be resolved in the short term, and even face the risk of collapse. The burden of responsibility placed on the shoulders of personnel appointed to hold the positions of Chairman of the Board of Directors and Director of PCF is extremely heavy. In some rare cases, for objective and subjective reasons, the PCF fails to successfully implement the approved recovery plan, is forced to go bankrupt and the DIV reimburses. At this time, as the leader, the dispatched personnel will be considered for responsibility. In the process of perfecting the mechanism for appointing personnel to participate in the administration and management of specially controlled PCFs, it is necessary to consider and promulgate a mechanism to exempt from liability and protect the interests of personnel appointed to participate in administration of weak management of PCF under specially controlled.
Fifthly, personnel appointed under the temporary regulations must satisfy all conditions and requirements prescribed by law to hold the positions of Chairman of the Board of Directors and Director of the PCF, and at the same time be fully qualified to carry out tasks assigned by the SBV during the process of restructuring credit institutions. This subject is usually a qualified, experienced officer and a key officer at the unit. The number of officers who satisfy this requirement in the DIV system is not much. In case it is necessary to send a large number of officers to take on tasks at the PCF, the DIV will have difficulty screening and selecting personnel.
On the other hand, sending officers to take on tasks at the PCF under special control, if done on a large scale, will affect the staff planning work at the DIV, temporarily causing a local shortage of quality human resources. This requires the DIV to foster and improve the quality of internal human resources, carry out personnel work methodically, systematically and flexibly, and plan for situations where it is necessary to appoint officers to take on tasks according to the requirements of the Government and SBV.
Sixthly, officers are sent to take on important tasks at a credit institution under special control, and the tasks are "temporary" in nature, and psychological turmoil is inevitable. It is not only a change in work content but also a change in responsibilities, changes in life, political activities... It is necessary to have measures to communicate, explain, encourage, support and supplement, change management skills for staff to promptly adapt to new work contexts and maintain public service spirit.
It can be said that appointing personnel to hold the positions of Chairman of the Board of Directors and Director of specially controlled PCFS is an important activity, helping to mobilize the resources of the DIV during the restructuring process of credit institutions. In the coming time, building and comprehensively perfecting a mechanism to serve the work of appointing personnel is necessary and is the key factor determining the effectiveness of this activity, thereby creating conditions for the DIV and its officials to successfully carry out the assigned tasks.
Communication Department
