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According to Clause 10, Article 13 of the Law on deposit insurance (DI), the DIV is responsible of compiling, analyzing and processing information about insured institutions in order to detect violations of prudential regulations and propose the State Bank of Vietnam (SBV) timely deal with these violations and risks affecting the safety of the banking system.
Achievements in 2020
In 2020, apart from operational activities implemented periodically and researches, the DIV’s supervision gained some considerable achievements as follows:
The DIV issued the Decision on amending and supplementing the guidelines on the implementation of the Regulation on supervision in order to ensure that supervision indicators for all insured institutions are applied effectively and synchronously throughout the whole system.
The Decision No. 1248/QD-BHTG dated December 31, 2019 of the DIV’s Board of Directors on amending some articles of the Regulation on reporting on insured deposits was implemented actively in order to create a database of deposits, help the DIV make important recommendations on DI policy such as raising the DI coverage limit, making plans for prompt and accurate reimbursement, thereby maintaining public confidence, contributing to ensuring the safety of the banking system.
Following the SBV Governor’s directions in the Directive No. 06/CT-TTg and the Scheme on strengthening and developing the people’s credit fund (PCF) system, the DIV was an active member of the Steering committee for examination of PCFs, under which the DIV compiled a report on the performance of “enhancing the DIV’s roles in supervising and timely assisting PCFs according to the Law on amending and supplementing the Law on credit institutions”, which is regulated in Directive 06. The DIV not only implemented supervision of 100% of insured institutions but also conducted intensive supervision to deal with problematic PCFs and timely reported emerging issues to the SBV to protect the legitimate rights and interests of depositors.
Moreover, the DIV actively reviewed and assessed the implementation of the Circular No. 34/2016/TT-NHNN on information sharing between the SBV and the DIV (Circular 34) to prepare for the amendment of Circular 34 in the coming time.
The DIV also made plans for examining certificates of DI participation in the whole system and implemented them to be ready to re-grant certificates of DI participation and copies of certificates of DI participation to all insured institutions when there is an adjustment to the DI coverage limit.
Besides, a training Course on supervision of insured institutions was successfully organized within the whole system of the DIV in order to provide staff with basic knowledge of banking and finance, accounting, and banking supervision. It also served as a forum for lecturers and learners who were involved with supervision to discuss and share their experience in supervision as well their difficulties and find solutions together to improve the quality of supervision.
Some orientations and recommendations
With the aim of continuously improving the efficiency of supervision and contributing to affirming the DIV’s role as a crucial financial institution in protecting the rights and interests of depositors, ensuring the safety and soundness of banking operations, contributing to maintaining the national financial system, some recommendations are proposed as follows:
First, to continue to promote the positive outcomes of supervision and develop plans, strategies and practical measures for effective supervision, contributing to the DIV’s achievements in playing its roles in the process of restructuring credit institutions.
Second, to continue to use information and data collected from the SBV and other resources in an effective manner to well implement supervision, making the DIV-conducted supervision an effective tool to assist the SBV in its management and supervision of credit institutions. Specifically:
To actively coordinate with departments of the SBV and related agencies for the amendment of Circular 34 in order to ensure the adequate and timely collection of information on insured institutions’ operations from the SBV.
To develop a mechanism for coordination and sharing information on insured institutions’ operations between the SBV branches and the DIV branches to improve the quality of the DIV’s offsite supervision.
To timely issue the DIV’s documents on supervision when there are changes in legal regulations or supervision requirements issued by the DIV and the SBV.
Third, to make good use of the Financial sector modernisation and information management system (FSMIMS), in which, to accomplish amendments to the Risk Management (RM) system and the Information Collection and Management (ICM) system, thereby ensuring that appropriate technological solutions will be applied to meet requirements for the time being and in the upcoming time; At the same time, to enhance research activity to apply new supervision methods and indicators and improve the quality of this important operation.
Fourth, to improve the quality of supervision human resources to strengthen the DIV’s risk monitoring through the below activities:
To enhance exchange between the DIV and experts in finance and banking and risk monitoring to share information of risks and issues in different financial segments through local and international training courses, seminars or workshops, thereby building and improving the DIV’s risk monitoring capacity.
To continue to organize training courses on supervision to improve staff’s knowledge and skills system-wide.
Supervision Department – Deposit Insurance of Vietnam
