DIV provided pilot financial assistance to local people’s credit funds

This pilot program is estimated to implement for 1 year with total budget of VND100 billion, in which VND50 billion will be reimbursed to credit funds in such cities and provinces as Hai Phong, Nghe An, Ho Chi Minh city and their surroundings during the stage 1 (the first 6 months). This is a positive signal to insured institutions. In addition it is an importance advance for DIV to further confirm is role in protecting legal rights of depositors, contributing to maintenance of finance-banking stability.

Firstly, the credit funds inside target areas must observe the following provisions to gain loans from DIV:

- Pursuant to Article 14, 15 of Decree 89/1999/ND-CP dated 01 Sep, 1999 of the Government, “an insured institution faces the risk of insolvency, but it has not been so serious to put the institution under special control”; and maintaining the operation of this institution contributes to system safety, socio-politics-economics stability.

In addition, these credit funds must satisfy the following requirements:

-          Always observe applicable laws of deposit insurance as well as safety and soundness standard in banking regulations

-          Presently being ranked A level by SBV, etc.

The above-said provisions are prescribed appropriately with the instruction No. 57-CT/TW given by Politics Bureau on consolidating and rearranging system of local people’s credit funds and on implementing VN government’s commitments to ADB within framework of the second banking-finance loan, guaranteeing assistance will be financed under strict conditions to minimize risks. DIV will consider and financially support legible people’s credit funds on time to help them to overcome temporary insolvency in the shortest time.

This pilot program is conducted during the time DIV has gradually finalized its system of regulations and become better prepared for expanding the support objects and manners satisfying applicable laws and international norms.