Accelarate to deploy deposit insurance operations

08:52-22/06/2022

In the context of the complicated development of the Covid-19 epidemic, right from the beginning of the year, the entire system of Deposit Insurance of Vietnam (DIV) has made great efforts and expeditiously implemented the work plan, sticking to monitoring the key tasks of the banking sector in 2022 and the Government's policy contents to support socio-economic recovery and development; focus on synchronously implementing deposit insurance professional activities in order to well protect the legitimate rights and interests of depositors.

As of March 31, 2022, there were 1283 organizations participating in the deposit insurance, including 97 banks and foreign bank branches, 1181 people's credit funds, 1 cooperative bank and 4 microfinance institutions.

In the first quarter of 2022, DIV has issued 36 copies and re-issued 02 certificates of deposit insurance (DI) participation at the request of the credit institutions after reviewing the validity of the documents, ensuring the compliance with legal regulations of granting and revoking the Certificate of participation in deposit insurance.

The whole system has strengthened supervision and strict control of the activities of credit institutions, especially weak and problematic credit institutions, and promptly proposed to the State Bank of Vietnam (SBV) to handle violations that may cause risks in the banking system.

DIV supervises 100% of DI participating institutions through data from the SBV and reporting information on insured deposits; completes the supervising report for the entire system of credit institutions, and the in-depth supervising report for problematic PCFs.

Right from the beginning of year 2022, DIV has urgently implemented the  periodical inspection plan for DI participating institutions; at the same time, organize a training conference on examination regulations and guidelines for the implementation throughout the system in order to unify the examination work of the DIV.

Immediately after receiving the direction of the Governor of the SBV on assigning the DIV to examine 53 PCFs, the DIV held a conference to carry out the inspection of PCFs under the direction of the Governor of the SBV in 2022 to evaluate, summarize and learn from experience in examination work for 22 PCFs under the direction of the Governor of the SBV in 2021. At the same time, train and guide the contents and methods to carry out the inspection in 2022 to bring the highest efficiency; send documents to the Banking Supervision Agency and the SBV provincial branches to jointly handle and coordinate during the implementation.

According to the report of the DIV, in the first quarter of 2022, the DIV carried out the examination of 51 organizations participating in the DI system, of which 01 PCF was examined under the direction of the Governor of the SBV.

DIV has urged and guided the DI participating organizations to calculate and pay DI fees to in accordance with regulations to supplement the professional reserve fund. The total amount of DI fees collected in the first quarter of 2022 was nearly 2,400 billion VND. DIV also waived fees for organizations that were in specially controlled with the amount of more than 54 billion VND.

In the first 3 months of the year, DIV did not receive special loan request from specially controlled institutions, and did not incur any obligation for payout to depositors at DI participating institutions. However, the DIV has appointed staff to join the Special Supervisory Boards, actively monitored the process of handling legal entities for DI participating organizations that were specially controlled. Develop a plan on idle capital for special loans in 2022, and train staff on special lending profession. Develop a plan for payout to implement when the obligation arises.

In order to strengthen the management of the PCFs of the SBV’s branches under the direction of the Governor of SBV, the DIV signed the Regulation on working and exchanging information with 46 out of 57 provincial branches of the SBV and effectively implement the signed document.

With the aim of promoting the dissemination of the DI policy, the DIV has implemented public awareness programs at the annual general meetings of the PCFs; organize events to the staff of the PCFs, commercial banks and microfinance institutions. In addition to the official communication channel of the DIV and newspapers and magazines, the DIV in collaboration with the Communications Department of the SBV develops a plan to participate in a number of communication programs of the banking industry to be implemented in 2022.

In order to continue to supplement the professional reserve fund, improve financial capacity so that the DIV can better perform its assigned functions and duties as well as participate more deeply and effectively in the restructuring process of credit institutions, DIV always closely monitor the fluctuations in the financial and monetary market, deploying plans to invest temporarily idle capital to ensure safety and capital development. Revenue for investments in the first quarter of 2022 is nearly 999 billion dong. Up to now, the professional reserve fund has reached more than VND 79.8 trillion.

In order to improve the DI policy to better protect the legitimate rights and interests of depositors, the DIV has actively studied and participated in the drafting process of the Law amending and supplementing a number of articles of the Law on DI; coordinate with the relevant units of the SBV in commenting on the draft plan to study, review and make a proposal for the formulation of a Law amending and supplementing a number of articles of the Law on DI. In addition, carrying out an assessment of the DI Law; drafting specific contents on DIV’s participation in the restructuring process of the specially controlled DI participating organizations to be proposed in the draft Law amending and supplementing the Law on DI.

Currently, the whole system of the DIV actively study international experiences on deposit insurance, comparing and proposing appropriate amendments to the Law on DI in order to maximize the role of DIV in protecting depositors; enhance coordination with the Banking Inspection Agency to finalize the 12th Draft of the Strategy for Development of DI to 2025, with a vision to 2030, and to explain comments and suggestions from the Ministries and Sectors for the Draft Strategy.

DIV also actively participates in international cooperation activities, international seminars and conferences such as: Round-table conference with Deposit Insurance Corporation of Japan; supporting the Project of the Lao Deposit Protection Office; sharing information with Taipei Central Deposit Insurance Corporation; conducting a survey on the participation level of members of the International Deposit Insurance Association in 2022…

DIV said they will continue to strengthen coordination with the SBV, improve supervision efficiency of DI participating organizations to promptly report to the SBV if any violation happens. Closely monitor the situation of weak PCFs placed in special control, promptly deploy a solution plan when the payout obligation arises in accordance with the legal regulations. At the same time, enhance the examination of DI participating organizations, actively participate in the development of the draft Law amending and supplementing a number of articles of the Law on DI; implement professional activities towards becoming an effective tool of the Government and the SBV in ensuring the safety of banking operations.

Communication Department