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Credit institutions (CIs) (including commercial banks, cooperative banks, people's credit funds, microfinance institutions and foreign bank branches, except policy banks) mobilize deposits from individuals must participate in deposit insurance. Depositors will be recognized for their deposits in case the credit institution goes bankrupt or becomes insolvent. The depositors' legal rights and interests are always guaranteed.
In Vietnam, there is only one deposit insurance - Deposit Insurance of Vietnam (DIV) - a state-owned financial institution, operating for non-profit purpose, implementing deposit insurance policies, protecting rights and interests of depositors, contributing to maintaining the stability of the system of credit institutions, ensuring the safe and healthy development of banking activities.
Identify credit institutions that have participated in deposit insurance
How can depositors know that a credit institution has participated in deposit insurance?
Article 15, Law on Deposit Insurance stipulates: "Organizations participating in deposit insurance must publicly post a copy of the Certificate of deposit insurance participation at all transaction points that receive deposits."
The copy of the Certificate of deposit insurance participation is a copy issued by DIV from the original book. Certificate of deposit insurance participation is a document showing that a credit institution has participated in deposit insurance. Depositors at public institutions will be protected by DIV not only through reimbursement policies when that credit institution falls into a state of insolvency or bankruptcy, but also through examination, supervision, special control, special loans...
Certificate of deposit insurance participation must be publicly posted.
Insured institutions have to publicly post copies of the Certificate of deposit insurance participation at the following locations:
(1) At the headquarters of the insured institutions;
(2) At the branch office of the public institutions;
(3) All transaction points that accept individual deposits.
Therefore, depositors can identify whether a credit institution has participated in deposit insurance by observing whether the credit institution's transaction point has a copy of Certificate of deposit participation insurance posted or not. A copy of the Certificate of deposit insurance participation with full information of the Certificate of deposit insurance participation, including: name of the deposit insurance; name of reputable institution; other contents according to regulations of DIV.
If insured institution does not publicly post a copy of the Certificate of deposit insurance participation at all transaction points that accept deposits, the organization participating in deposit insurance will be fined according to point a, clause 1, point a, clause 6, Article 38 of the Decree No.88/2019/ND-CP dated November 14, 2019 of the Government regulators sanctions for administrative violations in the field of currency and banking as follows:
“Violation of deposit insurance regulations
1. A warning shall be imposed for one of the following violations:
a) Failure to publicly post copies of Certificate of deposit insurance participation at all transaction points that accept deposits;
b) Paying deposit insurance premiums incompletely or not on time as prescribed by the law;
c) Violating the deadline for submitting applications for a Certificate of deposit insurance participation as prescribed in Clause 1, Article 14 of the Law on deposit insurance.”
Thus, an insured institution that does not publicly post a copy of its Certificate of deposit insurance participation at all transaction points that accept deposits will be subject to a warning. At the same time, it is mandatory to immediately publicly post a copy of the Certificate of deposit insurance participation for this violation.
Deposits of individual depositors at insured institutions are automatically announced
Depositors who are individuals when depositing money into a credit institution that participates in deposit insurance do not have to pay deposit insurance premium. Credit institutions that mobilize deposits from individuals must participate in deposit insurance and are responsible for paying deposit insurance premium in full and on time.
The Law on deposit insurance stipulates that the deposit insurance premium is the amount of money that an insured institution has to pay to the DIV to insure the deposits of insured depositors at the insured institutions.
The current deposit insurance premium is 0.15% per year calculated on the average deposit balance of insured deposits at insured institutions. This deposit insurance premium has been maintained since the establishment of DIV until now. Deposit insurance premiums are calculated and paid quarterly during the financial year.
DIV is responsible for calculating and collecting deposit insurance premium for public institutions. This agency says that most institutional institutions have well complied with the regulations on calculating and paying deposit insurance fees in accordance with the Law on deposit insurance and the guidance of the DIV.
On the part of credit institutions, they also need to be responsible to depositors, pay deposit insurance premium fully and on time, coordinate with DIV to resolve problems of insured depositors, strictly comply with the Law on deposit insurance and safety in banking operations.
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