Trang Chủ
Specifically, the Chairman of National Assembly paid attention to the content of demarcation of the authority of the State Bank of Vietnam (SBV) and the Governor of the SBV contents related to activities of early detection, resolving credit institutions, intervention with special measures.
In addition, the compatibility issue between the Law on Credit Institutions and other laws such as the Law on Deposit Insurance, the interference between the banking and insurance sectors, the banking and investment in securities and bonds, etc. need to be discussed, researched and clarified.
Previously, in mid-March, at the 21st session of the National Assembly Standing Committee, the National Assembly Standing Committee gave comments on the addition of the 2023 Law and Ordinance development program with the revised Law on Credit Institutions; Chairman of the National Assembly of Vietnam Vuong Dinh Hue noted that the amendment of the Law on Credit Institutions should be paralleled with the amendment of the Law on Deposit Insurance to ensure uniformity.
Thus, it can be seen that the amendment of the Law on Deposit Insurance is really necessary and urgent in the current context, thereby, creating a premise for the Deposit insurance of Vietnam (DIV) to participate more deeply in the process of restructuring credit institutions, especially for the role in resolving insured institutions.
The basis for deposit insurer to participate in resolving weak credit institutions in recent years
Before the Law on Deposit Insurance existed, according to the provisions of Decree No.89/1999/ND-CP on deposit insurance, DIV supported participating organization at risk of insolvency but not to the extent that they were placed under special control in the form of supporting loan to cover insured deposits; guaranteeing special loans to cover deposit payment; repurchasing debt in case that debt has secured assets.
Then, Decree No.109/2005/ND-CP has some important changes to the financial support function, specifically, DIV only considers and decides the financial support for the insured institution after SBV determines that the dissolution or bankruptcy of a insured institution can cause serious, far-reaching effects on the safety of the financial system, banking and political, economic and social stability. DIV may provide financial support to the insured institution in the form of loans, guarantees, debt redemption and other forms in accordance with the law.
By the end of 2012, DIV provided support loans to 5 people's credit funds (PCFs) with a total amount of over VND 6.9 billion. Although the disbursed amount was not much, it was timely to help the unit ensure its solvency, stabilize its operations, retain people' trust, avoid the risk of unnecessary breakdown, and stabilize political security, social order and safety in the area. By the end of 2015, the entire amount of support loan from DIV has been fully recovered.
After the Law on Deposit Insurance took effect from January 1, 2013, there was no regulation on the financial support operations of the DIV. Therefore, DIV no longer provides financial support services. The Law on Deposit Insurance stipulates that the DIV participates in the process of special control over the insured institution in accordance with the regulations of the SBV.
According to the Law amending and supplementing a number of articles of the Law on Credit Institutions promulgated by the National Assembly on November 20, 2017 and took effect on January 15, 2018, DIV is allowed to make special loans to specially controlled credit institutions, especially to support liquidity, support recovery under the approved recovery plan, compulsory transfer plan. DIV coordinates with the Special Control Board and the Cooperative Bank of Vietnam to assess the feasibility of the people's credit fund's recovery plan. For the recovery plan of microfinance institutions and financial companies, DIV will coordinate with the Special Control Board to assess the feasibility.
In addition, based on the decision of the SBV, DIV is entitled to purchase long-term bonds from the credit institutions to provide financial support for the healthy credit institutions to participate in governance, control, administration, and support finance and operations of weak credit institutions are specially controlled.
Within 30 days since the Government decides on bankruptcy policy of the specially controlled credit institution, DIV is responsible for coordinating with the Special Control Board and the specially controlled credit institution in formulating the bankruptcy plan of the credit institution under special control, review and unify data on the current status of payable deposits and submit them to the SBV for consideration.
DIV has appointed staff to join the Special Control Board at the PCFs which are specially controlled to perform tasks as assigned by the head of the special supervisory board; focus on comparing and verifying data on deposits, making a list of depositors, especially supporting specially controlled PCFs belonging to commercial banks to participate in resolving and implementing the approved plan.
In addition, DIV also actively cooperates with the Banking Supervision Agency, branches of the SBV in provinces and cities, and the Special Control Board to handle arising situations, giving opinions on the plan to handle the specially controlled PCFs, participating in assessing the feasibility of the restoration plan.
With the synchronous implementation of the above activities, it has helped the DIV complete the tasks in the process of participating in special control in accordance with the provisions of the Law on Credit Institutions in 2017; thereby ensuring the safety of banking operations, well protecting the legitimate interests of depositors.
Legal barriers
According to experts, DIV has actively promoted its role in the process of restructuring credit institutions, as well as taking part in dealing with weak insured institutions over the past time. However, the reality shows that there are still certain shortcomings on the legal basis. In particular, the provisions on the authority of the deposit insurer in the Law on Deposit Insurance are not consistent and in sync with the current system of legal documents on restructuring, hindering the role of the deposit insurer in restructuring the credit institution and handling the weak institutions.
Typically, the Law on Credit Institutions of 2017 stipulates that the deposit insurer participates in the development of plans for restructuring the PCFs. However, the provisions on the rights and obligations of deposit insurance organizations in the Law on Deposit Insurance are not guaranteed for the deposit insurers to participate more deeply in the restructuring process of credit institutions (such as participating in supporting the examination and supervision of the PCFs, participating in the development of plans for restructuring the PCFs, special loans for specially controlled PCFs, etc.).
Or as the content of special loans to credit institutions under special control, the Law on Credit Institutions of 2017 stipulates that DIV makes special loans to financial companies, people's credit institutions, and microfinance institutions; DIV buys long-term bonds of supporting credit institutions according to the decision of the SBV. However, the Law on Deposit Insurance does not stipulate these contents.
The Law on Deposit Insurance also does not have regulations on the SBV's decision on the purchase of long-term bonds from the credit institutions by the SBV. Meanwhile, this content is stipulated in the Law on Credit Institutions amended in 2017.
Experts said that the Law on Deposit Insurance is not synchronized with the current legal system on restructuring credit institutions as well as incompatible with the reality, which slows down the progress of DIV to participate more deeply in the restructuring process of credit institution, especially the PCFs.
In addition, the heterogeneous framework, mechanisms and policies will also limit the effectiveness of depositor protection as well as the operation of the deposit insurer. Therefore, it is necessary to soon amend the Law on Deposit Insurance in a synchronous and consistent manner with relevant laws, including the revised Law on Credit Institutions; overcome the existing inadequacies so that the deposit insurer can increasingly promote its role in protecting the interests of depositors; especially participating more deeply and effectively in the process of restructuring and resolving weak credit institutions.
Amend the Law on Deposit Insurance soon
In the Development Strategy of Deposit Insurance to 2025, with orientation to 2030 approved by the Prime Minister, the tasks and solutions set out for deposit insurance activities in the period of 2022 - 2025 have revised and supplemented contents. The Law on Deposit Insurance and the system of guiding documents for the implementation of the Law on Deposit Insurance and the Law on Credit Institutions in order to implement new tasks of the deposit insurer in restructuring weak credit institutions; completing regulations on the financial regime of the deposit insurer to ensure the implementation of the deposit insurance development strategy.
Regarding the orientation in participating in special control and resolving weak insured institutions, the leader of DIV said that in the coming time, the deposit insurer will continue to closely coordinate with the SBV in the process of special control in order to guarantee the interests of depositors.
Along with that, implementing the functions and tasks specified in the amended Law on Credit Institutions, including Special lending to specially controlled credit institutions; Buying long-term bonds of supporting credit institutions under the decision of the SBV; Participating in assessing the feasibility of the recovery plan of microfinance institutions, financial companies, and people's credit funds; Participating in formulating the bankruptcy plan of specially controlled credit institutions. Strengthen financial capacity through diversification of investment forms and portfolios; supplement the form of borrowing from the SBV in case the deposit insurer's capital is not enough to pay the insurance premium. Study, implement and supplement the investment portfolio including: Buying and selling government-guaranteed bonds; depositing money at a commercial bank with good operational quality; buying and selling bonds, promissory notes, bills, certificates of deposit issued by commercial banks with good operational quality...
DIV informs that by 2025, DIV will do research and apply additional measures and forms of resolving weak insured institutions in accordance with international practices and actual conditions in Vietnam. At the same time, improve financial capacity through proposing competent authorities to amend and supplement relevant legal provisions, ensuring sufficient legal basis to increase charter capital for DIV to VND 10,000 billion by 2025 and VND 15,000 billion by 2030 from self-accumulation and other legal capital sources, in order to ensure the financial capacity of the deposit insurer.
It can be seen that the amendment and supplementation of the Law on Deposit Insurance to synchronize with relevant laws is continuing to receive great attention from both the National Assembly and the Government, in order to affirm the policy and direction throughout protect the legitimate interests of depositors and create a legal basis for DIV to effectively participate in the restructuring of credit institutions. This is also a strong commitment of the State in constantly preserving and improving depositors' confidence in the deposit insurance policy, creating a solid legal framework for effective implementation of deposit insurance activities in Vietnam.
