Trang Chủ
Proposals on shortening the reimbursement timeframe in line with international practice
Regarding payout procedures, deputy Tran Hong Nguyen (Lam Dong Province) basically agreed with the provisions proposed in the draft Law on Deposit Insurance (amended). However, the deputy emphasized that the deposit insurance payout timeframe should continue to be reviewed with the aim of further shortening it.
Clause 4 of the draft Law on Deposit Insurance (amended) stipulates: “Within forty-five days from the triggering of the insurance payout obligation, the deposit insurance organization shall reimburse insured depositors”. Deputy Tran Hong Nguyen noted that although this timeframe was shortened compared to the current law, it should be further adjusted in line with international practice.
Therefore, deputy Tran Hong Nguyen suggested that the drafting agency consider the nature and complexity of cases to set a suitable maximum reimbursement timeframe. Specifically, for large credit institutions or complex cases, the process could be longer; whereas for simple cases, the period should be shorter to ensure depositors receive full and timely insurance payouts. He also urged that Deposit Insurance of Vietnam (DIV) to make better use of digital technology and data management to reduce the actual payout time to a minimum.
Deputy Thach Phuoc Binh (Vinh Long Province) also argued that the maximum payout period should be capped at 30 days, in line with the standards of the International Association of Deposit Insurers (IADI).
Besides the payout timeframe, the early payout mechanism also drew attention from deputies. Deputy Tran Hong Nguyen agreed with the draft Law’s approach of defining an earlier triggering date for the payout obligation. This would allow the DIV to reimburse depositors once the State Bank of Vietnam (SBV) issues a document to suspend the deposit-taking activities of a credit institution under special control with its accumulated loss exceeding 100% of its charter capital and reserve funds, according to its most recently audited financial statements.
Deputy Luong Van Hung (Quang Ngai Province) proposed studying a mechanism for making partial advance payouts up to the minimum insured amount once the payout obligation is triggered, in order to meet depositors’ essential needs in a timely manner and minimize the negative psychological impact of a credit institution's failure. He also emphasized the importance of applying information technology and data systems, and of simplifying depositor verification procedures, in order to improve the efficiency, transparency, and accessibility of deposit insurance, aligning with the broader trend of financial system modernization.
According to deputy Nguyen Hai Nam (Hue City), “the earlier the reimbursement is made, the better the situation is handled”, as it both reduces losses and strengthens depositors’ confidence in the banking system.
Synthesizing the above viewpoints, many deputies agreed that reimbursement provisions should be flexibly designed, with the shortest possible payout timeframe varying according to the level of complexity. The early reimbursement mechanism should be carefully studied to ensure both timeliness and safety. Concurrently, the DIV should continue investing in technology, data systems and automation to enhance reimbursement accelerate payout speed and mitigate systemic risks.
Promoting digital transformation to enhance the efficiency of deposit insurance reimbursement
On behalf of the drafting agency, SBV Governor Nguyen Thi Hong acknowledged the deputies’ opinions and affirmed that the SBV would continue to review provisions with a focus on providing prompt and accurate information in order to shorten the deposit insurance payout timeframe.
The Governor noted that although the designed reimbursement timeframe is shorter, sufficient time must still be ensured for the deposit insurer to review, especially in cases involving a large number of depositors or complex documentation. The SBV will consider the use of technology and digital transformation in deposit insurance operations.
The primary objective of the draft Law on Deposit Insurance (amended) is to maximize protection of depositors’ rights while contributing to the stability of the financial and banking system, in line with both international practices and Vietnam’s actual conditions.
Research and International Cooperation Department (translation)
