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Establishing the position and affirming the role of the deposit insurer
In Vietnam, DIV is the only deposit insurance organization, established by the Government in 1999, operating to protect the legitimate rights and interests of depositors. The Law on deposit insurance defines that the deposit insurer is responsible for formulating a deposit insurance development strategy for the State Bank of Vietnam (SBV) to submit to the Prime Minister for approval and implementation. This is a directional document, specifying the objectives in each development stage of DIV, closely following the legal frameworks, mechanisms and policies in the banking and deposit insurance sectors as well as the banking sector strategy in general.
The deposit insurance development strategy recently approved by the Prime Minister has determined the position and affirms the role of the deposit insurance in the coming period: the development of DIV contributes to stabilizing the financial and banking system of Vietnam, promote the socio-economic development of the country. The deposit insurance policy adheres to the goal of protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of the system of credit institutions and foreign bank branches, and ensuring safe and healthy development of banking operations. In addition, strengthening the role of DIV in the process of participating in restructuring weak deposit insurance participating institutions associated with bad debt settlement. The Government's view is to strengthen research and application of international standards in deposit insurance activities as well as professional activities related to deposit insurance participating institutions. DIV will gradually innovate in the direction of meeting the Core principles for effective deposit insurance systems of the International association of deposit insurers (IADI), in line with the overall orientation of the Banking industry strategy and reality in Vietnam. At the same time, the rapid and sustainable development of the deposit insurance organization will be the result of the application of modern science, technology and innovation along with the development of high-quality human resources.
It can be said that the development of deposit insurance policy and deposit insurance organization is a parallel process, thereby positively affecting the system of credit institutions. The views and orientations on the development of deposit insurance have shown the consistent view, the unified goal of the Government and the banking industry in raising the level of the deposit insurance organization and maximizing the effectiveness of depositor protection.
Sharing opinion about the strategy development process, Mr. Pham Bao Lam - Chairman of the Board of Directors of DIV said that the special feature of the Strategy on deposit insurance development to 2025, with orientation to 2030 is that the DIV has set specific goals, closely and quantified the deposit insurance professional activities to better protect the legitimate rights and interests of depositors. The Chairman of the Board of Directors of DIV expressed his belief that the objectives, groups of tasks and solutions set out in the deposit insurance development strategy of will have a positive impact, helping the DIV promote its strengths and overcome the limitations and bottlenecks in the development of the deposit insurance system, implement the deposit insurance policy, protect the legitimate rights and interests of depositors, strengthen public confidence in the financial-banking system and contribute to the stable development of the socioeconomic.
Opportunities and challenges for DIV
The deposit insurance development strategy to 2025, with orientation to 2030 has set specific goals to perfect and improve the effectiveness of the deposit insurance policy. It is striving for the ratio of fully insured depositors to total insured depositors to reach 92% - 95%, ensuring compliance with international practices; striving to shorten the actual payment time from the time of arising the insurance payment obligation to 30 working days by 2025 and 15 working days by 2030 in order to help depositors have early access to deposit when the insured institution is resolved. In terms of raising public awareness of the policy, striving to achieve the goal that by 2025, 45% and by 2030, 55% of depositors will understand the core contents of the deposit insurance policy.
In order to implement the deposit insurance development strategy effectively, Mr. Pham Bao Lam - Chairman of the Board of Directors of DIV clearly stated that DIV would focus on the key groups of tasks and solutions, including participating in the amendment and supplementation of the Law on Deposit Insurance, the system of documents guiding the implementation of the Law on Deposit Insurance as well as completing regulations on financial regimes for the deposit insurer; periodically reviewing and evaluating the suitability and propose to adjust the insurance payment limit in line with international practices as well as propose an appropriate time to develop and deploy deposit insurance premiums on the basis of assessment and classification of organizations participating in deposit insurance. DIV would continuously improve operational efficiency, in which: promoting digital transformation, applying modern technology to all professional activities, DIV will improve its financial capacity, streamline and specialize its organizational structure; synchronization in operating administration; develop high-quality human resources.
Since the DIV was established as well as since the Law on Deposit Insurance was approved until now, this is the first time the Deposit insurance development strategy has been promulgated. The development strategy is a special document that clearly outlines the orientation, roadmap, goals and solutions to perfect the deposit insurance policy, and at the same time activates and unlocks the potential for the development of the deposit insurer in the future. With the strategy prepared meticulously, seriously and carefully, having achieved high consensus from the Government and the SBV, DIV is standing on the threshold of transformation and growth, worthy of the assigned responsibility, proves to be the fulcrum for the system of credit institutions and preserve the trust of depositors.
