Trang Chủ
International integration and changes to the financial and banking system.
For the financial and banking system, international integration has brought development opportunities as well as great challenges. Vietnamese commercial banks can directly compete with foreign banks that are strong in finance, professional in management and operations, and modern in technology, thereby having closer access to international standards, developing a variety of products and services, improving management and financial capacity. International integration also helps international investment capital flows into Vietnam grow strongly, creating favorable conditions for the banking system to increase liquidity and increase business opportunities.
In addition, the sharp increase in demand for banking and financial services has opened up opportunities for Vietnamese commercial banks. Many well-developed domestic banks have expanded their markets and increased international cooperation.
In addition to opportunities from international integration, the banking industry also faces many challenges. formation, the Vietnamese market is still considered a new market, with much untapped potential due to low accessibility to banking services. This has increased opportunities for international banks to access domestic customer market share, thereby affecting the domestic bank market...
To overcome challenges, commercial banks must always be conscious of renewing themselves through diversifying products and services, applying modern technology, increasing capital, improving the quality of human resources, and managing according to international standards.
DIV has made a significant contribution to stabilizing the operations of credit institutions
DIV is the only organization implementing deposit insurance activities in Vietnam, with the goal of protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of credit institutions, ensuring safe and healthy development of banking activities.
Up to now, after 24 years of implementation, the deposit insurance tool is considered to have made a significant contribution to stabilizing the operations of credit institutions in Vietnam. Outstanding success is assessed for deposit insurance activities in the following aspects:
Firstly, deposit mobilization from the population increased sharply, people increasingly trusted credit institutions, considering them a safe, profitable investment channel;
Second, the activities of credit institutions have more participation in control of DIV, risks in credit activities are limited;
Third, depositors' interests are protected more publicly and specifically. After 24 years of deposit insurance policy being implemented, not a single individual depositor has lost money because a credit institution encountered difficulties and stopped operating;
Fourth, resolving difficulties of credit institutions is not being used from people's tax money but from deposit insurance premiums,
Fifth, the awareness of protecting and developing the trust of depositors has received more attention from public institutions.
Although the success of deposit insurance activities has been affirmed and acknowledged, to better protect depositors, DIV needs to operate more actively and promote its role.
Promote the role of DIV
In the context of increasingly deep international integration, the Vietnamese Dong (VND) is easily affected by fluctuations in strong foreign currencies. Currently, DIV is only insuring deposits in VND. This is also one of the factors contributing to anti-dollarization and improving confidence in the national currency. In addition, the financial market operates at a fast pace, with large volumes, and the number of banks merging, converting, and even going bankrupt may increase, making depositors worried.
The fact that DIV protects deposits of individual at insured institutions with a reasonable coverage limit will create peace of mind, contribute to promoting the capital mobilization process, and prevent sudden withdrawals that threaten liquidity of banks. That has helped strengthen depositors' confidence.
Deposit insurance is an effective policy tool of the State Bank of Vietnam (SBV) and the Government. Through professional supervision and examination of activities of public institutions, DIV detects signs of risk, signs of weakness, violations of regulations on deposit insurance and safety in operations. banks, naturally react and recommend appropriate solutions or reporting to the SBV for remedial measures. In the context of integration, DIV needs to strengthen examination, supervision, early warning activities and have a mechanism to closely coordinate with financial safety supervision agencies such as the National Financial Supervisory Commission; Bank supervision and examination agencies... contribute to maintaining the safety of the system of credit institutions.
In the race for customer market share, the competitive advantage usually belongs to large banks. However, with the presence of deposit insurance policy, that gap has gradually been shortened, because the role of DIV is to contribute to ensuring system safety, not just for a single credit institution. That has created equality in competition among credit institutions.
Currently, there are more than 100 countries in the world that have established deposit insurance systems. In countries with strongly developed economies in general and banking systems in particular (typically the US, Japan...), deposit insurance tools are highly respected and used effectively. In Vietnam, building an effective deposit insurance model demonstrates deep integration into the world economy, especially in the aspect of ensuring the safety of the financial and banking system.
In recent times, DIV has actively implemented the application of the basic principles for developing an effective deposit insurance system developed by the International Association of Deposit Insurers (IADI), gradually meeting international standards.
Participating in the TPP Agreement, commercial banks have many opportunities to expand their market share to foreign markets, combining with international partners. The presence of DIV has specifically demonstrated the Vietnamese Government's commitment to protecting depositors. Participate in deposit insurance helps the reputation of commercial banks increase, Vietnamese commercial banks become more modern and operate healthily. This shows that the deposit insurance policy has improved to contribute the reputation of commercial banks.
However, for deposit insurance activities in Vietnam to increasingly develop, DIV needs to:
Firstly, perfect the legal system on deposit insurance. Completing the legal document system for deposit insurance activities should be based on research and analysis of the specific situation of the banking and deposit insurance system in Vietnam and refer to the experience of the deposit insurance systems around the world to ensure that legal regulations are issued in in accordance with the domestic situation towards and international standards and practices. Organizations implementing deposit insurance activities need to proactively review to propose competent agencies to amend, supplement and promulgate relevant legal documents to ensure effective implementation of deposit insurance operations.
Secondly, determine the appropriate deposit insurance coverage limit. Determining the coverage limit should be based on the assessment of the financial capacity of the deposit insurance organization, the level of economic development, the level of improvement in average domestic income, the rate of inflation, etc. Before establishing the new coverage limit, it is requires a survey and assessment of the current status of public deposits to have a plan to set the appropriate coverage limit. The process of evaluating coverage limit periodically (5 - 10 years depending on the economic situation) needs to have a continuous implementation plan, as a basis for timely and proactive proposals to authorized authorities. The periodic assessment aims to determine the appropriateness of the current deposit insurance coverage limit in the short term and serves to adjust the appropriate deposit insurance coverage limit in the medium and long term. Timely adjustment of deposit insurance coverage limit contributes to better protecting the interests of depositors, has the effect of encouraging maximum mobilization of community banking resources into the national system, and makes important contributions to investment. sustainable economic development and increased capacity for deep international economic integration.
Thirdly, improve the quality of supervision and examination. Develop a monitoring process in the direction of shifting from compliance monitoring to monitoring based on risk level assessment. Supervision regulations need to be strictly developed and promptly adjusted when there are relevant changes.
There is an internal coordination mechanism between supervision, examination, collect deposit insurance premium and reimbursement to ensure information about the unit's operations is received fully and promptly, avoiding duplication or omission. information, especially for public institutions that need attention and organizations that are in a state of special control.
To promote the development of the contribution of deposit insurance activities to banking activities and economic development, deposit insurance tools need to be researched and adjusted towards a risk mitigation model. evolving, expanding examination powers, not only checking legal documents, posting deposit insurance certificates and deposit insurance premium, but also checking the safety of operations of public institutions.
Fourth, improve financial capacity. To ensure financial capacity, within the framework of deposit insurance policy, it is necessary to determine the appropriate target deposit insurance fund size and plans to achieve the determined target fund size. When setting up a specific target fund, it is necessary to carefully consider factors such as macroeconomic conditions, characteristics of the financial system, legal regulations on supervision, safety examination and resolve breakdown. The target fund ratio can be determined based on the percentage between the operational reserve fund and the public deposit balance. Furthermore, it is necessary to build a special support mechanism for deposit insurance organizations to be able to quickly access capital to support resolution in case of widespread banking difficulties.
Clearly define the role as a public policy tool of the Government and the SBV to ensure the interests of depositors and be a part of the national financial supervision system in the context of integration. DIV is making efforts to implement strategic goals, always accompanying credit institutions to take advantage of opportunities and overcome challenges in the integration process./.
Communication Department
