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Well perform research activities to develop mechanism, policy and long-term strategy
In order to ensure synchronous development with the long-term development strategy of the financial and banking industry, in 2022, the Deposit Insurance of Vietnam (DIV) has actively coordinated with the Banking Inspection Agency to finalize the Draft strategy on deposit insurance development on the basis of receiving comments from the SBV, relevant ministries, branches and units, especially towards the direction of Deputy Prime Minister Le Minh Khai. On December 30, 2022 Deputy Prime Minister Le Minh Khai signed Decision No.1660/QD-TTg approving the Strategy on deposit insurance development to 2025, with orientation to 2030, and the DIV is urgently developing the draft action plan to implement the deposit insurance development strategy to synchronously deploy tasks and solutions in each phase.
Along with that, the DIV has actively and regularly coordinated with the Legal Department, the Banking Inspection Agency and functional departments of the SBV to carry out all tasks according to the regulations of the SBV plans and tasks, at the request of the Drafting Committee to amend and supplement a number of articles of the Law on Deposit Insurance. Units in the whole system have contributed comments and proposed policy contents to amend and supplement a number of articles of the Law on deposit insurance, with a sense of responsibility, the proposed contents are guaranteed closely with the reality in the stage of making the proposal to develop the Law amending and supplementing a number of articles of the Law on Deposit Insurance.
In 2022, DIV proactively proposed and agreed with functional units of the SBV on 5 key policies in the proposal to amend and supplement a number of articles of the Law on Deposit Insurance, including: (i) Complete regulations on deposit insurance premiums; (ii) Improve the financial and operational capacity of the deposit insurer; (iii) Supplement the rights and obligations of the DIV; (iv) Complete legal regulations for the DIV to participate more deeply in the process of restructuring weak credit institution in Vietnam; (v) Complete regulations on the time when the insurance payment obligation arises to ensure timely and effective reimbursement. These are the key tasks in the orientation and implementation of the DIV in the coming time.
In addition, on the basis of Resolution No.02-NQ/DUK dated June 7, 2021 and the direction of the SBV on implementing digital transformation at enterprises until the by 2025, with a vision to 2030, the DIV has established a Steering Committee and a supporting team for Digital Transformation at the DIV; at the same time approving the Digital Transformation Plan at the DIV to 2025, with a vision to 2030, directing the supporting team to work directly with units throughout the system to clarify difficulties, obstacles and identify the needs in the process of using software and applications at DIV, in order to submit to the Steering Committee for approval of the DIV’s Digital Transformation Plan in 2023 as well as the whole period up to 2025, with orientation to 2030. This is the basic premise for the modernization of all professional activities as well as internal processes on the basis of new technology, so that the DIV can keep up with the 4.0 scientific and technological revolution with foresight, transparency and efficiency.
In the third quarter of 2022, the SBV reported and submitted to the Prime Minister on the adjustment and supplement of charter capital for the DIV after the end of the deposit insurance component FSMIMS project. Currently, the DIV continues to closely coordinate with relevant units of the SBV to monitor and update the Prime Minister's direction on the increase of charter capital for the DIV and is ready to make explanations when necessary.
In order to promote its role in the management of people's credit funds under the direction of the Governor of the SBV, the DIV has directed units throughout the system to actively coordinate and work with the provincial branches of the SBV to continue to sign and effectively implement the signed contents in the Regulation on coordination and information exchange between the SBV's provincial and municipal branches and the DIV’s regional branches. Up to now, the DIV has completed the signing with 56 out of 57 SBV branches in provinces and cities with People's Credit Funds in the area of operation, reaching 98.2% of the set target. Currently, the DIV South Central and Highlands branch is still actively coordinating with the SBV branch in Phu Yen province to soon complete the signing of the Coordination Regulation, achieving 100% of the set target.
According to the initial assessment, the DIV’s regionl branches actively implement the functions and tasks agreed in the content of the Coordination Regulations with efficiency; regularly coordinate closely with the SBV branches in provinces and cities in capturing and sharing information, improving the effectiveness of supervision, promoting the role of supporting the SBV in examining the people's credit fund, promptly proposing and recommending solutions for people's credit funds that violate the law, potentially posing risks of unsafety in banking activities.
Synchronously and effectively deploying deposit insurance expertise
Currently, there are 1,283 institutions participating in the deposit insurance, including 97 banks and foreign bank branches, 1,181 people's credit funds, 1 cooperative bank and 4 microfinance institutions.
In 2022, DIV has issued 230 copies of Certificate of deposit insurance participation, re-issued 15 Certificates of deposit insurance participation and temporarily revoked 01 Certificate at the request of insured institutions as regulated by the laws. DIV periodically reports to the SBV through the Banking Supervision Agency on the observance of legal regulations on the issuance and listing of deposit insurance participation certificates of insured institutions.
DIV has directed units in the whole system to continue and carry out continuous and regular supervision of 100% of insured institutions in the area under their management; proactively control the quality of information and report forms received from the SBV in accordance with the provisions of Circular No.34/2016/TT-NHNN; urging and reminding insured institutions to send information and reports on insured deposits as prescribed; at the same time, studying and proposing the expansion of the scope of supervision, closely following the performance of the money market as well as the activities of credit institutions; strengthening the monitoring of information related to cross-ownership, accrued interest in banking activities to improve the quality and content of supervision; regularly connect, provide and exchange information with examination activities; coordinate with SBV's branches in provinces and cities in supervising and handling after examination of insured institutions, in order to promptly advise, propose and recommend to the SBV on arising issues that may cause risks and insecurity of the system.
In order to take the initiative early and prepare all resources for examination, from the beginning of 2022, the DIV has directed and guided examination units throughout the system to flexibly organize the implementation of the examination plan that matches the size and operation of the insured institutions in the area under their management. To date, the DIV has completed the examination of 275/275 insured institutions, achieved 100% of the periodical examination plan and completed the inspection of 53/53 of the People's Credit Funds under the direction of the Governor of the SBV, achieving 100% of the assigned plan; at the same time, thoroughly ensured that examination units throughout the system seriously implemented a number of key contents and assigned periodic examination plans in 2023 for 277 deposit insurance participating organizations approved by the Board of Directors.
In order to take the initiative in financial resources to protect the deposits of more than 89 million depositors at 1,283 deposit insurance participating institutions as well as to fulfill the target of deposit insurance premium collection assigned by the SBV in 2022, the deposit insurer has actively urged, guided deposit insurance participating organizations to send a list of insured deposit balances for calculation and payment of deposit insurance premiums, and to calculate and collect deposit insurance premiums in accordance with regulations; promptly answer and handle arising problems in order to minimize late, excess and underpayment of deposit insurance premiums. Total deposit insurance premiums collected in 2022 exceeded 1.98% of the plan assigned by the SBV; the exemption of deposit insurance premiums in 2022 for organizations that are specially controlled was carried out according to regulations.
In 2022, DIV has no obligation to pay insurance premiums to depositors at deposit insurance participating institutions. However, the DIV continues to closely monitor the process of handling legal entities against the institutions participating in the deposit insurance which are weak people's credit funds and are specially controlled, closely following the process of handling legal entities by the SBV branches of provinces and cities and the conclusion and direction of the Governor of the SBV to proactively develop insurance payment plans for depositors subject to deposit insurance when necessary.
Currently, the professional reserve fund of DIV has reached VND 89,062 billion, with an increase of 16.9% compared to the same period in 2021. With the growing financial resources accumulated year by year, the DIV may be ready to reimburse depositors when necessary for small and medium-sized insured institutions; participate more deeply in the process of restructuring the system of credit institutions.
In 2022, DIV has preserved and well developed its capital. To date, the total capital of DIV has reached VND 95.7 trillion, with an increase of 15.8% over the same period in 2021. DIV has also exceeded the business plan targets assigned by the SBV. Specifically, total deposit insurance fees collected in 2022 exceeded 1.98% of the assigned plan. Total temporarily idle capital for investment increased by 16.1% compared to December 31, 2021. Meanwhile, the total investment amount in 2022 reached 103.51% of the assigned investment amount; revenue from investments in 2022 reached and exceeded 0.5% of the plan assigned by the SBV.
Communication activities are also paid special attention by the DIV. Accordingly, in 2022, the DIV has effectively organized a series of activities to disseminate the deposit insurance policy according to the approved plan, timely provide information on monetary policy and banking activities that need to be oriented and advised for depositors through live events, seminars, exchanges... bringing deposit insurance policy to more than 15,000 depositors; especially strengthening communication during the implementation phase of the proposal to amend and supplement a number of articles of the Law on deposit insurance and approve the deposit insurance development strategy, in order to improve public awareness and confidence for deposit insurance activities.
Development orientation in 2023
The above results come from the close and timely attention and direction of the SBV, the support of relevant ministries and branches as well as the efforts to strive, unite, and agree on a high level of managers and employees at the DIV.
Based on the direction and administration of the Government and the SBV; the functions, tasks and development orientation of the banking industry in general as well as the deposit insurance development strategy in particular, as a state financial institution with the goal to contribute to maintaining the stability of the banking sector and the system of credit institutions, ensuring the safe and healthy development of banking activities, in which, prioritizing the goal of protecting the legitimate rights and interests of depositors, the DIV sets development orientation in 2023 as follows:
Firstly, focus on promoting the effective implementation of the deposit insurance development strategy to 2025, with orientation to 2030, closely linked with the orientation and development strategy of the finance and banking industry.
Secondly, continue to effectively participate in the implementation of the Law amending and supplementing a number of articles of the Law on Deposit Insurance, strengthen coordination with relevant units of the SBV in the process of research and review the Law on Deposit Insurance, making a proposal to develop the Law amending and supplementing the Law on Deposit Insurance according to the plan of the Drafting Committee to amend and supplement a number of articles of the Law on Deposit Insurance.
Thirdly, focus on implementing the digital transformation plan at the DIV in each phase, with specific goal up to 2025, with a vision to 2030 approved by DIV’s leaders.
Fourthly, inherit and promote the achieved results, and at the same time overcome the shortcomings and limitations in 2022 to strive to achieve and exceed all the targets and plans in 2023 assigned by the SBV.
Fifthly, fully and synchronously perform the following tasks: Strengthening financial capacity, improving operational capacity, perfecting organizational model, improving staff qualifications, applying modern technology; supervising, examining, participating in special control, detecting and warning early about potential risks for deposit insurance participating organizations; participating in effective restructuring of weak credit institutions; calculating and collecting deposit insurance premiums; managing investment capital, disseminating deposit insurance policies, paying insurance..., ensuring compliance with international practices and legal regulations in Vietnam.
