Trang Chủ
What is the general role of the Deposit Insurance of Viet Nam?
Most countries with deposit insurance policies have two clear aims: to protect depositors and secure the banking industry. Public confidence in the banking system is an important commodity and can be significantly improved by implementing deposit insurance policies.
Pursuant to Article 29 in the Law on Deposit Insurance, the Deposit Insurance of Vietnam (DIV) was established by the Prime Minister as a non-profit financial organization to protect the legitimate rights and interests of depositors, contribute to the stability of insured institutions as well as the safe and sound banking development and enhance the public confidence in the national financial sector.
People have paid a lot of attention to the DI converage limit of VND50million (around US$2,380) and think it is inappropriate. What is your opinion?
The promulgation of the Law on DI is an important step in building a legal framework for deposit insurance in Viet Nam.
The Law doesn’t define the coverage limit as a specific number and the Prime Minister shall set the DI coverage limit for each period of time on basis of the proposal of the State Bank .
The State Bank of Viet Nam is currently researching an adjustment plan of the DI coverage limit to propose the Prime Minister.
Can you explain about the DI premium?
The deposit insurance premium is currently applied at a rate of 0.15% per annum calculated on the average balance of deposits of individuals at an insured institution of the total deposit. The downside of the flat rate is that high risk credit organisations don't pay a higher premium.
To deal with this, the Law stipulates that the Prime Minister would regulate the premium in line with the proposal from the Sate Bank of Viet Nam. The premium rate will vary according to the classification and assessment of the DIV on the credit institutions.
However, this requires serious research to perfect the ideal rating system. Our system will be based on the CAMELS model: an American supervisory rating system that assesses a bank's overall health by combining analysis of financial statements with onsite inspections.
It will be an important basis for collecting premium in a risk-based assessment.
However, one very important consideration with this model is privacy of the information used to compile the ratings. We need to avoid information links that would create an unfair playing field and cause damage to the banking system.This is an important goal in developing banking policy reform in Viet Nam.
The new premium system will be announced in due course.
What should the Deposit Insurance of Viet Nam do to implement deposit insurance policy?
We need a plan for implementing deposit insurance policy to develop our financial markets and help us integrate with the global financial system.
Institutionally, we need comprehensive and cohesive deposit insurance policy.
The Government promulgated the Decree No 68/2013/ND-CP detailing and guiding the implementation of the Law on DI. Relevant authorities are also researching and compiling instructive documents for implementation.
This will form the legal basis for the Deposit Insurance of Viet Nam activities in implementing deposit insurance policy in Viet Nam.
In the meantime, the DIV needs to strengthen financial and staffing capabilities. A communications plan is also needed to enhance public confidence in the banking system.
