Trang Chủ
The legal framework continues to be improved, creating conditions for the development of the DIV
The Deposit insurance development strategy until 2025, with orientation to 2030, opens a new era for deposit insurance activities in Vietnam. Therefore, 2023 is considered a pivotal year for DIV’s Strategy implementation efforts. The Deposit insurance development strategy is a "compass heading" and the successful implementation of the goals set out in each stage will contribute to perfecting the deposit insurance policy as well as the DIV’s operations, thereby better protecting depositors’ legitimate rights and interests.
In 2023, in order to successfully deploy these goals, immediately after the Strategy was approved, the DIV has developed an Action Program to implement the Strategy. Accordingly, the Action Program assigns responsibilities for monitoring, reporting, and evaluating the achievement level of specific goals; assigns responsibilities for implementing tasks and solutions of the Deposit insurance development strategy to each agency/department, and request those agencies/departments to implement the Strategy.
The DIV also develops the organizational implementation plan to ensure the achievement of specific goals and completion of assigned tasks, such as completing the legal basis for deposit insurance policy and improving operational efficiency of inspection/supervision activities, giving early warnings, and developing a project to apply additional measures and forms of handling weak insured institutions in a manner consistent with international practices and actual conditions in Vietnam, enhancing the deposit insurance reimbursement efficiency and asset liquidation, improving the effectiveness of deposit insurance policies dissemination...
In order to improve the organizational financial capacity, the DIV has also researched and proposed to the authorities in amending and supplementing relevant legal regulations, ensuring full implementation legal basis as follows: (i) Increase charter capital for the deposit insurer to 10,000 billion VND in 2025 and up to 15,000 billion VND in 2030 from self-accumulated sources and other legitimate capital sources to ensure the DIV’s financial capacity, affirming the State's commitment and enhancing depositors' confidence in the deposit insurance policy, ensuring resources for effective implementation of deposit insurance activities; (ii) Strengthening financial capacity by allowing the deposit insurer to diversify its investment forms and portfolios, including: Buying and selling Government-guaranteed bonds; Depositing money at commercial banks with good operating quality; Buy and sell bonds, debentures, bills, and certificates of deposit issued by commercial banks with good operating quality; Buy and sell local government bonds according to the provisions of the State Budget Law, the Law on Public Debt Management, guiding documents which have high credit ratings; (iii) Supplementing the form of loan from the State Bank of Vietnam (SBV) in case the DIV’s capital resource is not sufficient for reimbursement.
Contributing positively to the banking industry’s overall results
In 2023, the DIV continues to be proactive and improves the efficiency of professional activities to ensure compliance with the law, aiming towards international standards compliance, is determined to successfully implement the delineated political tasks, contributing to successfully carrying out the banking industry’s unified tasks.
The DIV has actively and closely coordinated with the SBV’s departments and relevant agencies to agree on the direction of a number of key policies in the proposal to amend and supplement a number of articles of the Deposit Insurance Law. Other aspects such as: administration-management, inspection, supervision, professional processes, finance, accounting, communication, staff management, training, union activities... continue to be innovated, improved and enhanced in terms of quality and achieve many positive results. This creates a favorable environment and conditions for the DIV to successfully complete assigned tasks and have safe, sound and effective development.
The DIV has effectively conducted main professional activities such as granting and revoking deposit insurance certificates, monitoring, inspecting, collecting premium, investing idle capital, participating in special control, reimbursement and promoting deposit insurance policies. Up to now, the DIV is protecting depositors at 1,280 insured institutions, including 96 banks and foreign bank branches (including 35 Vietnamese commercial banks, 2 joint venture banks, 9 banks with 100% foreign capital, 50 foreign bank branches), 1,179 people's credit funds, 1 cooperative bank and 4 microfinance institutions.
In particular, the Deposit insurance development strategy until 2025, with orientation to 2030, has set the goal of improving deposit insurance activities’ quality and efficiency, including early detection and warning of potential risks for insured institutions and participation in effective restructuring of weak insured institutions.
Recently, the DIV has actively participated in the process of restructuring weak CIs through in-depth monitoring, inspection and resolution plans proposal; successfully performing assigned tasks in the Program and plan to implement Directive No. 06/CTTTg dated March 12, 2019 of the Prime Minister and the Project to consolidate and develop the People's Credit Fund (PCF) system until 2020, with orientation to 2030.
Strengthening the role of the deposit insurer in early detection and timely intervention is highly suitable in the context that there is necessity to enhance the role of the deposit insurer in particular and ensure the stability of the banking system in general. Timely intervention can reduce the likelihood of bank resolution, contributing to maintaining banking system stability and public confidence while preserving the troubled banks’ value and enhancing depositor protection and minimizing losses to the deposit insurance fund.
In addition, the DIV also pays great attention to international cooperation activities such as strengthening bilateral cooperation with deposit insurers in the Asia-Pacific region, as well as actively participates in conferences and seminars, multilateral forums, joint research activities of IADI & APRC, thus contributing to the acquisition of valuable insights, enhancing the DIV’s operational efficiency.
In the banking-related crime prevention and crime fighting activities, the SBV and the DIV have an important role in implementing solutions to enhance access to official credit; protecting depositors’ legitimate rights and interests, thereby contributing to limiting and repelling "black credit".
The DIV has also coordinated with the SBV to strengthen communication on lending mechanisms and policies, banking services, deposit insurance ... to the population; warn people of the consequences and the necessity to avoid "black credit"; Develop television programs on financial education to help people have all relevant knowledge and have easy access to official banking and financial services. The DIV also published a Deposit insurance handbook for depositors; coordinated with the Department of Communications (SBV) to participate in the program “Tay hom chia khoa” (a financial management program) on VTV1. Those utilities need to be widely communicated so that people can easily access and learn about them.
Continuing to improve institutions and create a momentum for deposit insurance operations
In the near future, the global financial market may experience numerous unforeseen fluctuations, having significant impacts on the domestic economy and monetary policy management. In addition, new more risks are appearing such as high-tech crimes, fraud and appropriation. Recently, the incidents occurred in the bond, insurance, and deposit markets caused by some individuals have affected public confidence in the banking system. Therefore, the DIV’s role needs to be continuously promoted and elevated to a new prominence.
In the Deposit insurance development strategy until 2025, with orientation to 2030, the specific goals are all orientated towards depositors: Attempt to attain the fully insured depositors ratio target to 92% - 95%, ensuring compliance with international practices; Attempt to shorten the actual reimbursement duration from the activation condition trigger to 30 working days by 2025 and 15 working days by 2030, to enable depositors to have earlier access to their deposits when insured institutions are resolved; Attempt to achieve the goal of which 45% of depositors have knowledge of the deposit insurance policy’s core content by 2025 and 55% by 2030.
To realize the above goals, it is indispensable to improve institutions, which means to improve the confinity of regulations that hinder the progress of deposit insurance activities.
Departments under the SBV and the DIV need to research, review and propose amendments and supplements to the Law on State Bank, Law on Credit Institutions, Law on Deposit Insurance and relevant legal regulations in the direction of supplementing new support mechanisms for CIs which participating in restructuring other weak CIs with the purpose to minimize negative impacts on organizational finance and operations; Supplementing new functions and missions that enable the DIV to participate in restructuring weak CIs, researching and proposing amendments to the Deposit Insurance Law to utilize surplus deposit insurance premium to handle weak PCFs.
Amendments and supplements to the Deposit Insurance Law need to follow the direction of: Sticking to and concretizing the Party's policies and guidelines, and the State's legal policies. Research is needed to enable the DIV to participate more in the process of restructuring and handling weak CIs in order to make deposit insurance policy an effective tool to better protect depositors’ interest; ensuring increased financial capacity and effective use of available resources to achieve assigned goals.
At the same time, there is a need to have a mechanism to strengthen the deposit insurer’s financial resources. Practice shows that the deposit insurer cannot effectively prevent risks when its financial capacity is too modest compared to the capital scale of insured institutions.
In particular, human "capital" is a key factor that determines the operational efficiency of the DIV. Working in a deposit insurer means being "exposed" to depositors and CIs’ risks. Therefore, deposit insurance staffs must be even more trustworthy: solidly skilled – pure hearted – professionally mannered.
On the DIV’s side, it is necessary to improve financial and administrative capacity, develop information technology infrastructure, improve professional quality and international integration , contributing to the effective implementation of the tasks prescribed in the Law on Deposit Insurance and additional tasks in the new period, as well as medium and long-term orientations, protect the legitimate rights and interests of depositors more effectively in the CIs' restructuring and developing process in the near future.
The DIV must make more efforts and become more determined in carrying out assigned political tasks, focusing on a number of emphases such as: Research, coordinate, and clearly define roles and responsibilities in restructuring and handling troubled CIs; Actively coordinate with the SBV in the process of restructuring and handling weak PCFs and implementing effectively the State Bank's instructions in inspecting PCFs; Implementing the Deposit insurance development strategy until 2025, with orientation to 2030; Innovate and improve organizational efficiency, further promote digital transformation activities, apply technology in direction and administration...
The DIV needs to aim towards building and preserving public trust in the banking system through proper and complete enhancement of public awareness of the deposit insurance policy. In particular, deposit insurance policy communication should focus on the following solutions: maintaining a leading role in policy communication; contribute to creating social consensus; making the people center of the policy; taking full advantage of communication in the 4.0 Revolution era and focusing on training proper policy communication teams.
Department of Research and International Cooperation (translation)
