Trang Chủ
On the morning of January 12, 2014, on the air of Economic Forum Program (hosted by News and Current Affairs – VOV1, The Voice of Vietnam), Mr. Nguyen Huu Nghia - Head of Banking Supervisory Agency – State Bank of Vietnam (SBV), Mr. Nguyen Manh Dung – Vice General Director – Deposit Insurance of Vietnam (DIV) and Mr. Dao Hao – Vice General Director of Vietcombank had a discussion on risk management stipulated in Circular No.02 issued by SBV and the role of DIV in maintaining the depositors’ confidence in the current context.
Circular No.02 promulgated on 21 January 2013 provides the regulations on asset classification, risk provisioning and utilization of provisioning to handle banks’ credit risks. The Circular aims to improve risk management of credit institutions towards a closer approach to risk evaluation criteria of international credit institutions. Recently, The Prime Minister has once again requested SBV to actively implement it with no more delay.
On the talk-show, Mr. Nguyen Huu Nghia – Head of Banking Supervisory Agency – SBV clarified the importance of Circular 02, emphasizing the necessity of the regulations on asset, risk provisioning towards the enhanced capacity of credit risk management, which is more appropriate to credit institutions and more closer to international practices. Mr. Nghia asserted that in order to apply the Circular 02 effectively without negative impacts and to support the banking sector, businesses and the whole economy, SBV would consider and amend it to match reality. Especially, SBV will design a proper roadmap for the implementation of some stipulations in this Circular.
From the perspective of DIV on protecting the legitimate rights of depositors and contributing to banking safety and soundness through periodic supervision of 100% of insured institutions, Mr. Nguyen Manh Dung – Deputy General Director of DIV said Circular 02 helps credit institutions, branches of foreign banks report on credit quality, bad debts more accurately, which, in turn, facilitates the restructuring process in accordance with the Decision No. 254 of the Prime Minister on banking system restructuring in the 2011-2015 period.
As a commercial bank, Vietcombank has responded rapidly to the Circular 02. Mr. Dao Hao stressed that right after the promulgation of the Circular, Vietcombank had formed a special team responsible for drafting necessary documents, setting an automatic loan classification system which is connected with clients. Therefore, Vietcombank is now ready to implement Circular 02.
Talking about improving depositors’ confidence, Mr. Nguyen Huu Nghia said it would be necessary to implement simultaneous tasks including promoting public awareness, strengthening DIV’s capability, disclosing and clarifying policies. Answering the question of a listener in Kon Tum as to the current deposit insurance coverage limit of VND 50 million which is too low and can not encourages people to deposit money with banks, Mr. Nguyen Manh Dung explained that the VND 50 million coverage limit has been applied since 2005. At that time, this coverage limit was 3 times greater than GDP per capita and protected about 85% depositors. Since then, GDP per capita has increased significantly and other related factors have changed. Therefore, this coverage limit is outdated and fails to meet depositors’ legitimate requirements. Currently, DIV has suggested SBV and other relevant authorities increase the coverage limit up to VND 150 – 200 million.
Enhancing the transparency and capacity of corporate governance and risk management of credit institutions has become increasingly urgent. At the same time, it is necessary to consolidate depositors’ confidence. The 45-minnute length of the Economic Forum program is enough to introduce some sustainable directions on the banking system’s development through the discussion between the experts. In order to reach the desired destination, credit institutions, the regulatory agencies, and the players of the financial safety net must be determined and take action now.
