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The Revised Law on Deposit Insurance – The Need for Enactment
Regarding the political and legal basis, the SBV noted that the Revised Law on Deposit Insurance was developed in line with the orientations of the Government and the National Assembly on economic development and banking reform, and to concretize the tasks set out in important documents such as:
Plan No.81/KH-UBTVQH dated November 5, 2021, of the National Assembly Standing Committee on the implementation of Conclusion No.19-KL/TW of the Politburo and the Scheme on Orientation of the Legislative Program for the 15th National Assembly’s term, which set forth the task of researching and reviewing to propose amendments, supplements, or development of new laws, ordinances, and resolutions, including the task of “Researching and reviewing the Law on Deposit Insurance.”
Resolution No.191/NQ-CP on the thematic session on lawmaking in June 2025, in which the Government agreed on the necessity of enacting the Revised Law on Deposit Insurance and basically endorsed the five policy groups proposed by the SBV. The SBV was assigned to take the lead and coordinate with relevant ministries and agencies to study and incorporate the comments of Government Members at the session, in order to improve the policies under the Revised Law on Deposit Insurance in accordance with regulations. The objective is to ensure that deposit insurance organizations operate proactively, effectively, and safely, increase revenue, strengthen financial capacity, and mitigate risks.
Decision No.986/QD-TTg dated August 8, 2018, of the Prime Minister approving the Development Strategy of the Vietnamese Banking Sector to 2025, with orientation to 2030, which identified key tasks and solutions for the DIV, including strengthening financial capacity, enhancing operational capability, improving organizational model, advancing staff qualifications, and applying modern technology. These measures aim to ensure effective supervision and examination, participation in special control, early detection and warning of potential risks for insured institutions, effective involvement in restructuring weak credit institutions, calculating and collecting deposit insurance premiums, managing investment funds, promoting deposit insurance policies, and reimbursement in line with international practices and Vietnamese laws.
Decision No.1660/QD-TTg dated December 30, 2022, of the Prime Minister approving the Deposit Insurance Development Strategy to 2025, with orientation to 2030, which highlighted the key solution of improving the legal framework by revising and supplementing the Law on Deposit Insurance and guiding documents; improving regulations on the financial regime of the deposit insurance organization; enhancing financial capacity by diversifying forms and portfolios of investment; and allowing borrowing from the SBV in cases where the deposit insurance organization’s funds are insufficient for payouts.
Decision No.689/QD-TTg dated June 8, 2022, of the Prime Minister approving the Scheme on “Restructuring the System of Credit Institutions in Association with Resolving Non-performing Loans for the 2021–2025 period,” which included the solution of supplementing functions and tasks for DIV to participate in restructuring weak credit institutions.
Directive No.06/CT-TTg dated March 12, 2023, of the Prime Minister on strengthening solutions to ensure safe operations and consolidating the system of People’s Credit Funds, which required enhancing the role of and assigning tasks to DIV in coordinating and supporting the supervisory and examination functions of the SBV over People’s Credit Funds; and researching and proposing amendments to the Law on Deposit Insurance to allow the use of surplus premium funds to resolve weak credit institutions.
Notice No.311/TB-VPCP dated June 20, 2025, announcing the conclusions of the Government’s Standing Committee at the meeting on the policies of the Revised Law on Deposit Insurance. It requested further research, completion, and detailed reporting on the following: mechanisms to mobilize financial resources from credit institutions and insured institutions to ensure deposit insurance operations; clarification of political, legal, practical, and theoretical bases for the use of deposit insurance funds for special loans and restructuring weak banks, with deposit insurance organizations being allowed to participate and use resources in resolving and restructuring weak credit institutions, while ensuring timely payouts to depositors; regulations on investment activities of deposit insurance organizations to ensure proactivity, effectiveness, safety, risk mitigation, increased revenues, and strengthened financial capacity; SBV’s responsibility for State management, supervision, and examination; designing tools for deposit insurance organizations to participate in SBV’s examinations; and strengthening the accountability of deposit insurance organizations in the process of restructuring and resolving weak credit institutions.
Practical Basis
According to the drafting agency, after 12 years of implementation, the Law on Deposit Insurance has achieved certain results. The Law institutionalized the viewpoints, orientations, and policies of the State on protecting the rights and interests of depositors, reflecting the particular characteristics of Vietnam’s financial–banking system, in line with the country’s political institutions, and consistent with Vietnam’s socio-economic conditions.
Along with this, the legal framework, mechanisms, and policies on deposit insurance have been continuously improved. Following the entry into force of the Law on Deposit Insurance, sub-law documents were promulgated to provide detailed guidance and to concretize several provisions of the Law for implementation. These documents have formed a relatively adequate and comprehensive legal framework for deposit insurance activities and the operation of the deposit insurance organization.
The Law on Deposit Insurance ensures the consistency, coherence, and effectiveness of the legal system on finance and banking, creating conditions for enhancing coordination and the effective functioning of the components within the national financial safety net.
The Law was promulgated on the basis of reference to the experiences of other countries and the guidance of international organizations on developing effective deposit insurance systems, thereby ensuring a certain degree of conformity with international standards on deposit insurance.
The Law on Deposit Insurance serves as the highest and most comprehensive legal instrument on deposit insurance, stipulating in full all aspects of deposit insurance activities in Vietnam, clearly defining the position, functions, and tasks of the deposit insurance organization, specifying the rights and obligations of insured institutions and insured depositors, and providing detailed provisions on insured deposits, the timing of payouts, the amount of coverage limit, and the handling of deposits exceeding the coverage limit. In doing so, the Law has contributed to enhancing the effectiveness of deposit insurance operations, better protecting the rights of depositors, and playing an important role in ensuring the safe, stable, and sound development of banking activities.
“With the progress made in the provisions of the Law on Deposit Insurance, the DIV has been able to fulfill its role in protecting the legitimate rights and interests of depositors, thereby contributing to maintaining the stability of the system of credit institutions and ensuring the safe and sound development of banking operations,” the SBV emphasized.
In addition to these achievements, the Law on Deposit Insurance and its implementing regulations have also encountered certain difficulties and shortcomings that need to be addressed further to enhance the role of the deposit insurance organization and to ensure that deposit insurance policies truly deliver results, contributing to maintaining the stability of the credit institution system and ensuring the safe and sound development of banking operations, such as:
First, the rights and obligations of insured institutions and the deposit insurance organization need to be revised and supplemented to ensure consistency with relevant legal documents and with practical implementation.
Second, issues related to deposit insurance premiums require revision and supplementation to address shortcomings identified during implementation.
Third, the deposit insurance coverage limit and the timing of the arising of the obligation to pay insurance should be prescribed in a manner consistent and harmonized with other legal documents, thereby better protecting the lawful rights and interests of depositors.
Currently, the coverage limit (the maximum amount the deposit insurance organization pays per depositor per insured institution when that institution becomes insolvent) is VND 125 million. At this level, the ratio of fully insured deposits to total insured deposits in Vietnam stands at only 8.38%, significantly lower than the global average of 47%. Meanwhile, the proportion of fully insured depositors to total insured depositors across the system is 92.43%. However, if excluding depositors with balances between VND 1 and 50,000, this ratio drops to 87.89%, which is below the 90–95% range recommended by the IADI.
Fourth, current provisions on the timing of insured deposit payouts do not ensure timeliness, as there is no legal basis for the DIV to make earlier payouts when a credit institution encounters events that pose risks to system safety. The requirement that the deposit insurance organization may only pay deposits after a credit institution has been declared bankrupt does not allow DIV to fulfill its role in stabilizing depositor confidence, preventing contagion risks, and protecting depositors’ best interests.
In addition, on January 18, 2024, the National Assembly passed the Law on Credit Institutions. The 2024 Law on Credit Institutions revised and supplemented several provisions regarding DIV’s rights and obligations in early intervention and special control of credit institutions. However, certain provisions of the Law on Credit Institutions do not provide detailed regulations but instead refer to the Law on Deposit Insurance for implementation.
“This situation necessitates the revision and supplementation of the Law on Deposit Insurance to ensure consistency with the Law on Credit Institutions and to provide a legal basis for DIV to effectively carry out its assigned tasks, thereby contributing to maintaining the stability of the credit institution system,” the SBV emphasized.
The SBV affirmed that the development of the amended Law on Deposit Insurance is an urgent requirement to ensure the effective implementation of the Law in practice, its consistency with other relevant legal frameworks, and to provide the legal foundation for DIV to promote further its role and position as a deposit insurance organization.
Communication Department (Translation)
