Trang Chủ
Reporter: First of all, could you please let the readers of People’s Army Newspaper know why the Deposit Insurance of Vietnam was established?
The Deposit Insurance of Vietnam (DIV) was founded in 1999 in the context that many countries in Asia were establishing or reforming their deposit insurance (DI) systems with the belief that the DI system would serve as a safety valve for financial system in post-crisis.
By that time, transition economies also started DI schemes in accordance with their market economy orientation. The establishment of the DIV was a right decision of the Party and the Government in the stage of transition from a centrally-planned to a market-oriented economy. DIV has the ultimate mandate of protecting depositors to contribute to the safe and sound development of the financial system.
Reporter: What is the DIV’s role in the process of implementing the Government’s Resolution No. 11?
Presently, the financial and banking system has an increasingly important role in the economy. Thus, in Resolution No. 11, the Government has designated many tasks to the banking industry in order to achieve the goals of stabilizing the economy, controlling inflation and ensuring social security. For meeting the above-mentioned goals, there must be measures to protect depositors at credit institutions, strengthen public confidence in the financial and banking system, avoid panic, prevent bank runs when there appear untrue rumors, make deposit insurance payments to depositors in case of bank failures. These are the major tasks of the DIV.
Reporter: So, how has the Government’s Resolution No. 11 been being implemented in the DIV?
Right after receiving the Directive No. 01/CT-NHNN of the State Bank of Vietnam on the implementation of Resolution No. 11 in the banking industry, the DIV has held a conference on the deployment of the Resolution throughout its entire system. The conference has requested all departments, branches to review their 2011 operational plans and propose adjustments to their plans (adding more contents, rearranging the priority order …) for ensuring thrift in line with the direction of the Government and the general plan of the DIV.
Implementing the instruction of the Government on saving an additional 10% of regular expenditures, in addition to the above-mentioned measures, the DIV has actively cut its spending, limiting the purchase of new equipment and maximizing the use of existing facilities.
As for operation, we are stepping up propaganda work to raise public awareness about DI policy, thereby maintaining public confidence in the banking system. Besides, DIV has made timely and sufficient insurance payment to depositors, ensuring no claim over DI policy. The timely payment of sufficient amounts within the insurance limit to the right depositors has actively contributed to ensuring social order, security and safety in localities.
Reporter: The issue that many people are concerned about is the safety of the national financial and banking system. So, what measures does the DIV have to warn banks of risks?
The DIV is improving the quality of risk supervision in order to alerts the banking system to potential risks on behalf of depositors, thereby contributing to preventing bank failures, mitigating losses for depositors. In addition to the improvement of the model of risk supervision to comply with international practice, the DIV has studied and developed an early warning model for estimating the likelihoods of banks facing problems or having lower operational quality in a forecast period to suggest proper preventive measures.
DIV has also actively done macro-economic research as a basis for making policy proposals (through participation in the Advisory Council of National Monetary Policy) and for predicting the impacts of policy changes on the banking industry.
Reporter: In order for the DIV to fulfill its role as a safety valve for the financial system, contribute to the successful implementation of the Government’s Resolution No 11, what suggestions would you like to make on policy, mechanism?
One of the important factors to DI activities in the upcoming period is a strengthened legal framework. Despite more than 10 years of operation, the DIV’s activities have still been regulated by the Decrees of the Government. Meanwhile, according to international practice, Laws on deposit insurance or Laws on depositor protection are promulgated before deposit insurance institutions’ establishment.
Currently, the Law on deposit insurance has been officially incorporated into the 2011 Program on building Laws and Ordinances of the National Assembly. In order to assist the Law drafting Board, the DIV has been actively studying, keeping itself updated on international experiences and analyzing strengths and weaknesses of the current legal framework to make proper proposals for the draft Law on deposit insurance.
Thank you very much!
