Trang Chủ
What is deposit insurance?
Deposit insurance is a mechanism designed to protect depositors by reimbursing part or all of their insurable deposits in the event of the failure of an insured institution (e.g., a bank or a people's credit fund). To put it simply, deposit insurance is like having your money automatically insured once you deposit it at an insured institution. If the bank or people’s credit fund where you deposit goes bankrupt and is unable to return your money, the DIV will step in and reimburse you as prescribed by law.
Who are protected?
Individuals who place their savings in commercial banks, people's credit funds, microfinance institutions, or branches of foreign banks are protected by deposit insurance. However, deposit insurance only covers legal deposits in Vietnamese Dong, namely deposits placed at licensed institutions participating in the deposit insurance system.
Deposit insurance does not cover deposits in foreign currencies or funds placed in the form of investments, capital contributions, or stock purchases.
What does the DIV do to protect depositors?
Risk monitoring and early warning
The DIV does not simply “wait until an incident happens before taking action”. Instead, it continuously monitors the financial health of insured institutions using a range of operations, such as ongoing supervision of all insured institutions and regular and in-depth examinations conducted at the request of the State Bank of Vietnam. These aim to ensure that all insured institutions operate safely and soundly. Upon detecting any signs of instability, the DIV promptly informs the State Bank of Vietnam for timely intervention.
Raising public awareness of depositors’ rights
The DIV has actively launched communication campaigns to increase public awareness of their protected rights and to encourage people to money at licensed credit institutions. In many areas, especially in rural and mountainous areas, to raise awareness of deposit insurance, the DIV has carried out on-site communication activities, including banner displays, leaflet distribution, community dialogues, and collaboration with media agencies to publish articles on deposit insurance. These efforts help people to understand that their deposits at insured credit institutions are protected by the State.
Contributing to the resolution of weak institutions
When a credit institution faces difficulties or a crisis, the DIV may participate in the restructuring process, provide financial support, or undertake asset liquidation under the direction of the State Bank of Vietnam. These activities help stabilize the financial system and ensure the rights and interests of depositors.
Reimbursing depositors in the event of a failure
If a credit institution becomes insolvent or goes bankrupt, the DIV will promptly verify and compile a list of eligible depositors for reimbursement. This process is conducted publicly, transparently, and in accordance with procedures prescribed by law. Numerous depositors in rural areas have been reimbursed following the failures of local people’s credit funds.
Why should people be aware of deposit insurance?
A significant number of depositors, particularly those in rural areas, have entrusted their lifelong savings to illegal and uninsured “black credit” institutions. This often occurs out of convenience or personal connections, and many depositors do so without fully understanding their rights or the risks involved. Consequently, they may lose all their money if any risks arise.
Therefore, always keep in mind that depositing at an insured credit institution means being protected by the State.
Although Vietnam’s banking system is currently well-regulated and operates in a stable and secure manner, the presence of an institution like the DIV to protect depositors remains crucial. Acting as a “silent gatekeeper”, the deposit insurer helps people feel assured when using financial and banking services, especially in rural and remote areas.
Research and International Cooperation Department (translation)
