DIV: Depositor Protection for Sustainable Development

The DIV undertakes periodic off-site monitoring on 100% of insured institutions. On basis of reports submitted by insured institutions, the DIV has made an analysis and assessment of operations of these institutions, timely detected signs of weaknesses, violations of the regulations on safety of banking activities. Monitoring results showed that the operations of some insured institutions are of quite few risks. The DIV, in collaboration with State Bank of Vietnam (SBV)’s local branches, has handled and addressed difficulties of some weak people’s credit funds; monitored operations of those funds under the process of surveillance.

 

 

The DIV’s early warning mechanism has helped promptly assess exposure to risks of credit institutions in order to make early detection of organizations of financial problems and report to the SBV for timely control measures and examination priority setting.

 

 

In 2014, the DIV has examined 387 insured institutions including 45 commercial banks and 342 people's credit funds. For those insured institutions which had violations relating to overpayment, underpayment, deferred payment of deposit insurance premium, the DIV implemented a supplementary collection and apply proper penalties as provisions of law. For violations beyond the DIV’s authorities, the DIV submit a report to and make recommendation the SBV’s local branches for correction measures.

 

 

Although there were no obligations of insurance payment recorded in 2014, the DIV has actively monitored operations of weak credit institutions in order to prepare for timely resolution when necessary.

 

 

In 2014, the DIV granted, renewed, supplemented, re-granted certificate of deposit insurance participation for 465 credit institutions; revoked 86 certificates for cases of termination of operation, merger and closure of transaction offices. As of December 25th, 2014, 1,145 people’s credit funds, 89 commercial banks and the Cooperative Bank were granted certificate of deposit insurance participation. Granting certificate has been made timely, meeting requirements of credit institutions, by which contributes to enhancing the DIV's position.

 

 

According to the DIV's evaluation, insured institutions have seriously abided by the applicable regulations on calculation and payment of deposit insurance premiums. The DIV has actively urged, instructed and given feedback to questions and timely dealt with violations on calculation and payment of deposit insurance premiums. The DIV has collected deposit insurance premiums from 1,235 insured institutions. Actual accrued premiums has reached VND3,400 billion from the beginning of the year. The DIV has collected a supplementary amount of VND14.4 billion from those institutions underpaying premiums, on basis of the examination results.

 

 

Capital management has been made prudently, effectively in line with the regulation. As of December 31st, 2014, the total working capital of the DIV has reached VND21 trillion. By updating and making analysis on developments of financial - monetary markets and temporarily idle funds, the DIV has made the investment plan in accordance with the Law on Deposit Insurance in order for prudent and effective fund development.

 

 

With the aim of renewing the organizational structure associated with the assigned mandates and tasks and the Law on Deposit Insurance, preparing favor conditions for the building up of the sustainable development strategy, the DIV in 2014 has basically completed the organizational structure restructuring at the Headquarters and its Regional Branches. Accordingly, departments and divisions of the headquarters were re-arranged in order to focus its priority to policy and mechanism making and deposit insurance operations. The organizational structure in the Regional Branches has been strengthened in order to deal with imbalance of customers under surveillance in parallel with the Headquarters.

 

 

In addition, the DIV has attached its importance to the building of legal foundation that can meet demands of governance and direction. On basis of the Law on Deposit Insurance and documents guiding the implementation, the DIV has pro-actively made plans on building legal documents, instructions, operational processes such as the Instruction and Guidance on off-site monitoring, the Process of granting and revoking certificates of deposit insurance, regulation on reporting mechanism for insured institutions, the Instruction on investments of temporarily idle capital, the Instruction on deposit insurance payment, the Instruction on liquidation, the Instruction on examination... Especially, the DIV has coordinated with the SBV in completing the draft Circular on information exchange and sharing between the two parties.

 

 

In 2014, Information – Education – Communication (I.E.C) activities have been  effectively carried out, aiming at improving public awareness on deposit insurance. Particularly, in the 15th anniversary of establishment, the DIV's I.E.C and PR has been consolidated through the channels of special pages on selected newspapers, traditional newspapers, special thematic subjects on radio and television. These have attracted public attention, contributing to promoting deposit insurance policies and enhancing the DIV's image.

 

 

By bringing into play the whole system’s intelligence, making the highest priority to depositors as a direct subject of protection, the DIV's research has aimed at protecting the legitimate rights and interest of depositors, ensuring the safe and sound development of the banking system  and improving the quality of operations. The DIV's research has been focusing on the implementation of the Law on Deposit Insurance and legal documents guiding the implementation and improving the quality of operations. The DIV has completed procedures for acceptance of a research themed "Methods of assessment and early warning of risks for commercial banks in Vietnam." The macroeconomic, banking and financial reports of the DIV have been  highly appreciated. Meanwhile, the DIV has strengthened international cooperation in order to share experience, improve effectiveness of the deposit insurance system, including bilateral cooperation programs, participation in domestic and international conferences and seminars and international surveys of deposit insurance organizations.