Trang Chủ
The National Assembly’s Vice Chairman Vu Hong Thanh chaired the session
New Highlights in the Draft Law on Deposit Insurance (Amended)
Presenting the proposal, Governor of the State Bank of Vietnam (SBV), Ms. Nguyen Thi Hong stated that the drafting of the Law on Deposit Insurance (amended) was driven by urgent political, legal, and practical needs. This task was set forth in Plan No. 81/KH-UBTVQH of the National Assembly’s Standing Committee to institutionalize Conclusion No. 19-KL/TW of the Politburo on improving the legal system and renovating law-making activities. The amended Law also aligns with the policies for private sector development and the strategies of the banking sector and the deposit insurance system.
SBV Governor Nguyen Thi Hong presents the Government’s proposal on the Draft Law on Deposit Insurance (Amended)
After 12 years of implementation, the 2012 Law on Deposit Insurance has revealed several shortcomings that need to be addressed. In particular, the passage of the Law on Credit Institutions (Amended) on January 18, 2024, necessitates revisions to ensure legislative consistency and provide a solid foundation for the Deposit Insurance of Vietnam (DIV) to fulfill its expanded functions effectively.
The Government’s proposal emphasized that the amendments follows key principles, namely:
Fully institutionalizing the Party’s and State’s policies,
Retaining effective existing provisions while addressing legislative inconsistencies and practical obstacles;
Ensuring coherence with other related laws (especially the Law on Credit Institutions);
Drawing upon international best practices suited Vietnam’s context.
The Draft Law on Deposit Insurance (Amended) comprises eight chapters and 42 articles. This includes amendments, supplements to 28 articles, the addition of 7 new articles, the repeal of 2 articles, and the retention of 9 articles unchanged.
Governor Nguyen Thi Hong noted that the Draft Law introduces several new provisions to streamline administrative procedures and enhance the deposit insurer's operational efficiency. For instance, it simplifies the issuance and revocation of Deposit Insurance Certificates, enabling the DIV to automatically issue or withdraw certificates upon the SBV’s or other competent authorities’ granting or revocation of operational licenses for insured institutions.
To ensure a flexible premium system and stable funding base, the Draft Law authorizes the SBV Governor to set either a flat premium rate or differentiated premium rates tailored to the characteristics of Vietnam’s credit institution system in different periods.
For credit institutions placed under special control, the Draft provides that such institutions shall be granted a temporary deferral on outstanding premium payments, late payments, and any corresponding fines incurred prior to being placed under special control. However, these institutions must include a plan for repayment of deferred amounts in their restructuring plan for approval by competent authorities.
The Draft also clearly defines the triggers for deposit insurance payouts, which occur upon the earliest of the following events:
The approval of a bankruptcy plan for the credit institution;
The SBV’s confirmation that a foreign bank branch is unable to repay its depositors; or
The SBV's decision to suspend the deposit-taking activities of a credit institution under special control when its accumulated losses exceed 100% of its charter capital and reserves, as reflected in the latest audited financial statements.
In exceptional circumstances, the Governor of the SBV may authorize full reimbursement of all insured deposits held by a depositor at a failed institution. The deposit insurance coverage limit in bankruptcy cases is governed by the Law on Credit Institutions.
“These provisions are designed to strengthen the role of the deposit insurer in protecting depositors and maintaining the safety of the financial system,” Governor Nguyen Thi Hong emphasized.
Regarding investment activities, the Draft expands the permissible investment instruments for the deposit insurer, allowing it to:
Buy and sell bonds and certificates of deposit issued by commercial banks with state capital or state-owned enterprise capital exceeding 50%;
Deposit funds at such banks; and
Engage in other investment activities as prescribed by the Government.
Notably, the Draft Law introduces the deposit insurer’s new rights and obligations, including:
The right to examine insured institutions in accordance with SBV’s assigned scope and plans;
The right to receive special loans from the SBV, or borrow or receive financial support from the state budget, credit institutions, or other organizations under the Government guarantee;
The authority to appoint management and executive personnel at People's Credit Funds is under special control.
Ensuring Feasibility and Adequate Resources for the Implementation
Chairman of the National Assembly's Economic and Financial Committee, Mr. Phan Van Mai presents the Verification Report on the Draft Law.
Presenting the verification report, Chairman of the National Assembly’s Economic and Financial Committee, Mr. Phan Van Mai affirmed the necessity of amending the Law on Deposit Insurance. He noted that the legislative dossier largely complies with the Law on Promulgation of Legal Documents, and recommended that the drafting agency continue to review and refine the Draft Law to ensure constitutional alignment, legislative consistency, and practical enforceability—while carefully assessing the resources and conditions required for the law’s execution.
Regarding deposit insurance premiums, the Committee endorsed the Draft's approach. However, it urged the SBV to thoroughly conduct impact assessments to balance the financial capacity of insured institutions with the need to sustain a stable and adequate premium source for effective policy implementation.
Mr. Phan Van Mai emphasized the need for the phased adoption of a risk-based premium system, based on specific criteria for assessing and classifying credit institutions. He also highlighted the importance of defining “special circumstances” under which deposit insurance payouts may exceed the coverage limit and ensuring a transparent approval process involving the SBV and the Ministry of Finance. The policy of temporary premium deferment for credit institutions under special control must be clearly reflected in their approved restructuring plans.
Regarding investment activities, the Committee called for a comprehensive risk assessment and the establishment of a mechanisms to prevent risks, preserve capital, ensure liquidity, and evaluate performance to ensure prudent and effective investments.
Overview of the Session
Communication Department (translation)
