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maintain stable financial systems and develop equal financial markets and fair competition, mitigating the use of public funds for the bail-in of problem credit institutions. In this regard, communication programs have been given special attention. The Deposit Insurance of Vietnam (DIV), like other deposit insurers worldwide, attaches great importance to implementing communication programs and enhancing the awareness of depositors.
To promote the public awareness, understanding and confidence
In Vietnam, policy communication is regulated under the Law on Deposit Insurance as a function, mandate of the deposit insurer. The DIV has kept track of the evolving banking system, disseminated appropriate information to different audiences. Identifying depositors in remote and rural areas as target audience, the DIV disseminated information via broadcast media, organized events in co-operation with member institutions as well as directly communicated with the public. The DIV’s communication programs confirmed a message: The DIV protects depositors through examination, supervision, fund investment, reimbursement of insured deposits, etc., Moreover, depositors are protected by not only the DIV but also the Party, the Government through directions and policies as well as other competent authorities in the banking sector.
To date, the DIV received positive feedbacks from member institutions and depositors through communication events and public opinions collection channels. Director of Bo De People’s Credit Fund Nguyen Thi Bich Nga shared that the Certificate of Deposit Insurance was displayed at the most visible place at the counter so that depositors would see it easily. Additionally, when depositing at the counter, depositors would be informed by the fund’s staff or provided with information from fliers about deposit insurance policies. “Policy dissemination not only assures depositors when rumors spread but also promotes the Fund’s confidence during its operation. We expect that each staff will become a communicator of deposit insurance policy. I also suggest that the DIV provide us with more communication materials so that we could deliver them to all depositors”, said Ms. Nga.
According to Mr Le Dong Nam, a depositor from Da Lat, Lam Dong province, he knows that the Government has recently increased the deposit insurance coverage limit up to 75 million dongs through reading aDIV’s flyer. That means depositors would be better protected. He asserted that: “Even though we expect the coverage limit to be as high as possible, the increase to 75 million dongs reflects the Government’s concern about this and more importantly, depositors are totally exempted from paying premium but still insured”.
At communication events, people’s credit funds all admit that the information dissemination through different channels has helped to assure depositors in local areas to let their money at the funds, thereby local capital has beenmobilized and allocatedto local borrowers, and local economic effectiveness has been improved. They expect that the DIV would organize many more effective communication programmes to boost depositors’ understanding ofdeposit insurance policy, and confidence in the banking system in general and the credit funds in particular.
Crafting friendly and practical public-awareness program
Besidesdeposit insurance policy dissemination, many deposit insurers worldwide implement financial education programs. The Federal Deposit Insurance Corporation (FDIC) of the USA, for example, has developed “Money Smart” program to improve public awareness on financial and banking products. It identified specific target audiences such as: the youth, the elderly, small and medium-sized entrepreneurs, etc., In Korea, the Korean Deposit Insurance Corporation prioritized public awareness programs in the aftermath of the 2008 global financial crisis and started the programmes in 2010 with contents of knowledge, skills of using financial services, prevention of frauds, financial scams which were combined with other deposit insurance information. In Southeast Asia, the Malaysia Deposit Insurance Corporation (PIDM) has implemented “Money Smart 123” program to promote consumers’ awareness on financial services. The Money Smart 123 consists of three main topics: financial products, financial risks and financial interests. The Philippine Deposit Insurance Corporation has also executed a series of public awareness programs, especially in cooperation with schools to integrate financial literacy into their curriculum. Every June, the Depositor Protection andAwareness Week (DPAW) is launched focusing on disseminating information on the roles and functions of a deposit insurer, and how to wisely save money and prevent frauds.
Depositor protection has been highlighted as the deposit insurance policy’s and the DIV’s leading priority. Within its functions, mandates and resources, the DIV should concentrate on simple and practicalinformation such as: What should be noted when doing transactions with a bank teller? How to deposit money in a safe manner? What are the regulations for legal depositing? Where should you deposit? Thereby, depositors are able to enhance their understanding of and confidence in the banking system. They are also provided with sufficient knowledge to protect themselves from mistakes, frauds, violations of individuals and depository institutions. On the contrary, depositors meanwhile play an important role in maintaining market discipline and contribute to streamlining credit institutions.
Raising public awareness in the banking and financial system in general and deposit insurance policy in particular requires a long-term plan which should be implemented on a regular and continuous basis. Maintaining the stability of the credit institution system and the prudential banking operation are attributed to the deposit insurer, however, it also involves other stakeholders, including credit institutions and depositors.
