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Coverage limit
The Decree clearly states that the current coverage limit under Decree No.89/1999/ND-CP dated 1/9/1999 on deposit insurance and Decree No.109/2005/ND-CP dated 24/8/2005 amending and supplementing some articles of the Decree No.89/1999/ND-CP shall continue to be valid until the Prime Minister decides the coverage limit as made under the Law on DI. And so, the maximum insurance payout amount for all the insured deposits of one depositor at an insured institution (including principal and interest) still remains unchanged at VND 50 million.
This coverage limit has been set and kept since 2005 until now. However, the socio-economic situation in our country has changed: GDP per capita increased dramatically, the ratio of the coverage limit to GDP per capita decreased, inflation rate climbed and there is a large number of depositors owning deposits over VND 50 millions. As a result, maintaining the current coverage limit of 50 million VND will perhaps adversely impact the implementation of DI policy’s objectives as to protect the rights and legitimate interests of depositors at insured institutions.
Consequently, to protect the rights of depositors and enhance the confidence of the public, the coverage limit should be taken into consideration and timely amended to be in line with the practice.
Authorized insurance payout
Article 12, Decree 68 states that the Deposit Insurance Organization shall be entitled to authorize an insured institution to make insurance payment to insured depositors. Authorization must be made through a pay-out authorization contract as stipulated by law. Contents of the pay-out authorization contract must clearly states liabilities of the insured institution to use the money transferred from the Deposit Insurance Organization in order to pay exact amounts of insurance to eligible insured depositors on time. The insured institution which is authorized by the Deposit Insurance Organization to make insurance pay-out must satisfy the criteria: Complying with restrictions on ensuring the prudence in the institution’s activities for at least 6 latest months before the date of insurance payout and having a network of convenient locations to facilitate insurance payout.
Detailed regulations in authorized insurance payout help protect the rights of depositor. In case they wish to continue depositing, the authorized bank will directly accept. It will in turn benefit depositors, the insured institutions and the order of the society.
Receive the insurance payout
Decree 68 states that when receiving insurance payment, insured depositors must show their identity cards or passports. In case the receiver is the authorized person, inheritor of the insured depositor, in addition to identity card or passport, he must show other written evidence to prove his status as the authorized person, inheritor of the insured depositor as made under law. In the case of saving accounts, insured depositors must show their saving account certificate
In case of buying valuable papers issued by insured institutions, insured depositors must show certificates of deposit, bills, notes, bonds.
Consequently, the issue of the Decree detailing and guiding the implementation of DI law helps improve the DI legislative documents which plays the key role in the successful implementation of the DI policies, towards making Vietnam deposit insurance system become one of the most important member of the national financial safety net.
Translated by the Deparment of Research and International Affairs
