Trang Chủ
In recent times, the highest leaders of the National Assembly, the Government, and the SBV have repeatedly directed the building of a legal framework and mechanism to mobilize resources of the DIV to participate in the process of restructuring the banking system effectively and appropriately. This policy has gradually been realized through the Law amending and supplementing a number of articles of the Law on credit institutions (2017). Accordingly, in the current context, the role of the deposit insurance organization in restructuring process is most clearly shown in the process of consolidating and resolving small and medium-sized credit institutions, including PCFs that have problems.
In response to the request of the Governor of the SBV to develop internal regulations of DIV on appointing personnel to ensure standards and conditions for appointing personnel to hold key positions at the PCFs special control is required at the request of the SBV. The SBV provincial and city branches and DIV have done research of the legal framework as well as implementation experience of relevant units. After a thorough research and drafting process, in June 2023, the DIV issued the temporary regulation on appointing personnel to hold the positions of Chairman of the board and Director of specially controlled PCFs. This is a continuing step in implementing the policy of mobilizing resources of the deposit insurance organization to support the recovery of PCFs that have encountered problems that have been implemented recently.
Screening and nominating personnel to hold administrative and executive positions in PCFs under special control
Clause 1, Article 37 of the Law on credit institutions stipulates that “The SBV has the right to suspend or temporarily suspend the exercise of rights and obligations of the Chairman of the board, members of the Board of directors, Council of members, and Heads of committees, members of the Control board and executives of credit institutions violate the provisions of Article 34 of this Law and other relevant laws in the process of exercising assigned rights and obligations; request the competent authority to dismiss, elect, appoint a replacement or appoint a replacement if deemed necessary.” Accordingly, the SBV has the right to appoint replacements to hold the positions of Chairman, member of the Board of directors, Board of members, Head and members of the Supervisory Board, and specially controlled PCFs executives in case of necessity. This is the legal basis for the SBV to intervene early, appoint personnel to play key leadership roles of credit institutions with problems, thereby creating conditions for PCFs to return to normal operations and limit the risk of falling into financial difficulties or bankruptcy.
In order to implement the direction of the SBV, the temporary regulation on appointing personnel to hold the position of Chairman of the board and Director of PCFs under special control issued together with Decision No.375/QD-BHTG dated March 30/6/2023 of the Board of directors of DIV clearly indicates the scope of adjustment and principles for appointing personnel; Subjects, conditions, standards of nominated personnel; form, authority, time limit, process for appointing personnel as well as reporting regime of appointed personnel during the performance of tasks. At the same time, it determines salary, bonus, welfare and other policies for appointed personnel; evaluate, rank, emulate, reward and arrangement of appointed personnel after completing tasks.
According to the temporary regulation, after receiving a request from the SBV to send personnel, DIV will issue an implementation policy. The DIV branches have corresponding PCFs located in the assigned area and authorized management to review personnel to meet all conditions and standards; discuss and agree on the selection of expected personnel and discuss with the expected personnel about new work requirements and tasks. Subjects eligible for nomination consideration are employees holding leadership positions at the branches, including: director, deputy director, head of department, deputy head of department, the DIV branches reports to the General director and submits to the Board of directors of DIV for approval of the personnel expected to be appointed. After approval by the Board of directors, DIV will report to the SBV on the appointment of personnel to perform the required tasks. On that basis, the SBV considers and decides to appoint personnel of the DIV to hold the position of Chairman of the board or Director of PCFs who are under special control.
To prepare for the implementation of this task, DIV organized a professional training course on the management and operation of PCF in early 2023. Currently, resource officers under DIV are eligible to be nominated to hold administrative positions, operating the specially controlled PCFs has completed the first basic training course. The trainers participating in the training are personnel with experience in managing and supervising the operation of the PCF system as well as direct personnel in charge of administration and management at medium and large-scale PCFs. DIV is currently developing a second in-depth training course to continue to foster and improve the level of internal human resources, ready to respond when requested by the SBV.
Previously, based on the provisions of the Law on deposit insurance and the Law on credit institutions, DIV sent officers to participate in Special Control Boards at the request of the SBV. With the appointment of personnel from DIV to participate in the management and operation of credit institutions facing problems, the SBV has more tools to implement the normal operations of credit institutions in accordance with the provisions of law as well as create favorable conditions in the construction and operation of credit institutions. Implement the recovery plan after approval.
Complete the mechanism for mobilizing personnel from DIV to participate in the management and operation of PCFs that encounter problems
This is the first time that internal regulations have been promulgated on appointing personnel to hold the position of Chairman of the Board of directors, and the Director of PCFs is under special control - a specific area of activities. Therefore, the implementation of the above-mentioned temporary regulations first means piloting a new professional activity of DIV, which needs to go through an implementation process, and at the same time summarize, learn from experience and complete the improvement to serve the process of drafting and promulgating official documents. Besides, with its scope of functions and powers, the temporary regulations still have shortcomings and inadequacies that need to be resolved in the process of perfecting the mechanism soon.
Specifically, in Vietnam there are currently no specific, complete, and consistent regulations at the Law, Decree, Circular level to internal organizational regulations on the deposit insurance organization appointing officers to hold positions. The Chairman of the board and Director of PCFs are under special control. Thus, DIV promulgates temporary regulations that are only effective within the organization. There is no mechanism, order or procedure for inter-sectoral and inter-agency coordination in the work of sending personnel from higher document levels. Therefore, it is necessary to build a system of mechanisms and policies to create clear corridors for the implementation of this special field of operations.
In fact, the appointment of personnel to participate in the administration and management of specially controlled PCFs is being implemented as follows: SBV requests, DIV proposes personnel, SBV reviews and appoints appropriate personnel to hold the position of Chairman of the board or Director of PCFs that are specially controlled. Thus, this employee has a labor contract with DIV, but is sent according to a decision of the SBV to perform tasks assigned by the SBV, to work at a third unit which is the PCF, and may even hold the role as legal representative of the PCF. Therefore, it is necessary to clearly define the labor relationship of this employee with relevant parties in accordance with current regulations to be able to implement regimes and policies on labor, salary, social insurance, and health insurance. ...
Besides, this position also has specific challenges, beyond the normal scope of deposit insurance operations. Therefore, the salary, bonus, and emulation and reward regimes for officials appointed to hold administrative and executive positions at the PCFs need to be maintained at no lower level than before; but must still comply with current regulations of Laws, Decrees and guiding Circulars issued by the SBV, Ministry of Finance, The Ministry of Labour - Invalids and Social Affairs.
However, the current financial mechanism does not allow DIV to build budget estimates and salary funds in accordance with the task requirements of officials assigned to manage and operate the PCFs. Therefore, in parallel with the process of perfecting the legal basis, determining the financial mechanism to serve this activity is extremely important and needs to be regulated in legal documents.
From the perspective of the deposit insurance organization - the unit that selects and recommends staff for the SBV to decide, the personnel sent according to the temporary regulations are usually competent, experienced staff and key staff at the unit. Therefore, in case it is necessary to send a number of officers to take on tasks at the PCFs, the DIV will have difficulty screening and selecting personnel. On the other hand, the appointment of officers to take on tasks at the PCFs is under special control. If implemented on a large scale, it will also have certain impacts on the planning of cadres, and the DIV will temporarily have a local shortage of high quality human resources. This requires DIV to constantly foster and improve the quality of internal human resources, carry out personnel work methodically, systematically, flexibly, and plan for situations where it is necessary to appoint officers to take on tasks as the demand of the SBV.
It is also important to see that credit institutions being placed under special control means they are facing serious problems that cannot be resolved in the short term, and even face the risk of collapse. The burden of responsibility placed on the shoulders of the personnel appointed to hold the positions of Chairman of the board and Director of the PCFs is extremely heavy. In some rare cases, for objective and subjective reasons, the PCFs fails to successfully implement the approved recovery plan, forcing it to go bankrupt and DIV takes over the reimbursement of deposit insurance. In the process of perfecting the mechanism for appointing personnel to participate in the administration and management of specially controlled PCFs, it is necessary to consider and promulgate a mechanism to exempt and protect the interests of personnel appointed to participate in the administration and management of weak PCFs that are specially controlled.
It can be said that appointing personnel to hold the positions of Chairman of the Board and Director of specially controlled PCFs is an important activity, helping to mobilize the resources of the DIV during the restructuring process of credit institutions. In the coming time, building and comprehensively perfecting a mechanism to serve the work of appointing personnel is urgent and essential in determining the effectiveness of this activity, thereby creating conditions for DIV and their staff to successfully carry out their assigned tasks.
Communication Department
