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Reporter: How do you evaluate the banking operations, especially that of the People's Credit Fund ( PCF) system in Lam Dong province in recent times?
Mr. Vo Van Thanh: Currently, Lam Dong province has 57 public institutions, including 30 commercial bank branches and 25 PCFs.
In the first 8 months of 2024, the national economy showed signs of recovery, but challenges such as low capital absorption still persisted. However, with the decisive direction of the Governor and the leadership of the SBV, along with the determination of the entire banking sector in the area, credit institutions have continued operating stably and efficiently, well meeting the capital needs for production and business of enterprises and people in the area. As of September 2024, mobilized capital reached over VND 108,500 billion, an increase of over VND 7,000 billion compared to the beginning of the year (equivalent to an increase of 8%), total outstanding loan reached nearly VND 185,500 billion, an increase of approximately VND 4,800 billion compared to the beginning of the year (equivalent to an increase of 4%).
The PCF system in the province operated at a fairly large scale, with total mobilized capital reaching VND 12,250 billion, accounting for 11.4% of the total mobilized capital in the area; total outstanding loan reaching VND 9,130 billion, making up 5% of the total outstanding loan in the area. Regarding the total assets: There are 3 PCFs with total assets of over VND 1,000 billion, 9 PCFs with VND 500-1,000 billion, 7 PCFs with VND 200-500 billion, and 6 PCFs with less than VND 200 billion.
Most PCFs in the area have a long history of operation, being trusted by the people and supported by the local government. Their activities have significantly helped members and residents in the locality access capital to develop businesses, improve livelihoods, reduce poverty, and foster socio-economic development.
Reporter: In your opinion, what is the significance of the d< /em>eposit insurance policy to the safety and soundness of the PCF system?
Mr. Vo Van Thanh: It can be said that the deposit insurance policy plays a very important role in protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of the credit institutions system, ensuring the safe and sound development of banking activities; thereby contributing to the stability and development of the socio-economy.
Since its establishment, the Deposit Insurance of Vietnam (DIV) has made positive contributions to the operation of the banking system, especially the PCFs. In particular, the deposit insurance policy protects the legitimate rights and interests of depositors, contributes to strengthening public confidence in the banking system in general and the PCF system in particular; providing assurance that the Government and the SBV will ensure insurance payouts in case of risks at insured institutions.
For the PCF system, deposit insurance policy builds trust among the public, helping to mobilize idle deposits from the population for lending, thereby supporting production, creating jobs, and improving people's lives.< /p>
In recent times, in Lam Dong province branch, the DIV's South Central and Central Highlands regional has effectively promoted deposit insurance policy, examined and supervised public institutions, thereby contributing to strengthening public confidence in depositing money into the PCF system.
Reporter: Could you share more details about the coordination between the DIV's regional branch and the SBV's Lam Dong provincial branch in supervising and examining specialized institutions, as well as resolving the incident at the PCF of Ward 2, Bao Loc City recently?
Mr. Vo Van Thanh: Recently, the DIV’s South Central and Central Highlands regional branch has closely coordinated with the SBV’s Lam Dong provincial branch in implementing core operations; especially implementing the regulations on coordination and information exchange to promptly resolve arising situations, contributing to ensuring the safe operation of credit institutions in the area.
Along with the examination and supervision activities of the SBV, the DIV's South Central and Central Highlands regional branch has implemented off-site supervision, on-site examination and inspection directed by the SBV's Governor . These efforts have formed an independent supervision channel, contributing to the comprehensive risk management of PCFs in the region.
At the same time, effective dissemination of the deposit insurance policy is a critical aspect of the regulations on coordination and information exchange to help the people feel assured when depositing money, contributing to credit growth to meet capital needs for local socio-economic development.
In particular, in 2023, false rumors related to the PCF of Ward 2, Bao Loc City, led to a bank run, seriously affecting the operational safety of not only the Ward 2 PCF , but also all PCFs in the area.
However, with the drastic intervention of the SBV’s Provincial Branch; the timely attention and support of local authorities, police forces and media agencies; and the effective coordination of the DIV’s South Central and Central Highlands regional branch; the unstable situation at the Ward 2 PCF ended within a week, and the fund returned to normal operations shortly thereafter.
We highly appreciate the coordination and support of the DIV’s South Central and Central Highlands regional branch. Through the process of direct consultation with depositors at the PCF in Ward 2, the Support Team of the DIV's South Central and Central Highlands branch has promoted depositors' understanding of the deposit insurance policy, their legitimate rights and interests when depositing money, so that customers have confidence in depositing money back into the PCF.
Reporter: Please share your view on the importance of deposit insurance policy communication?
Mr. Vo Van Thanh: As a state management agency in the local monetary and banking sector, I believe that the deposit insurance policy has always actively supported credit institutions in their operations.
In particular, disseminating deposit insurance policy is an important task stipulated in the Law on deposit insurance and is also an indispensable part to promote the effects of the policy, because only when people know and understand will they clearly perceive how their legitimate rights and interests are protected; Thus, they will have confidence when depositing money in the banking system.
Reporter: Do you have any recommendations for the communication activities of the DIV in the coming time?
Mr. Vo Van Thanh: Moving forward, the DIV should diversify its communication methods, leveraging digital media to reach a wider audience, especially depositors in rural and remote areas.
In addition, communication efforts to promote deposit insurance policy require close coordination with local authorities, banks and PCFs to make the policy more accessible to the public.
At the same time, it is also crucial for the DIV to actively gather feedback from the public. It helps the DIV to welcome opinions from the groundswell, thereby refining its communication strategies and implying amendments to the Law on deposit insurance to the SBV to submit to the Government and the National Assembly. These amendments could further enhance the DIV’s role in restructuring credit institutions, particularly the PCF system, as prescribed in the Law on credit institutions 2024 that took effect on July 1st, 2024.
Reporter: Thank you very much!
Department of Research and International Cooperation (translation)
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