Optimal protection of depositors' rights and stability of the financial system

Governor of the State Bank of Vietnam Nguyen Thi Hong presents the draft Law on Deposit Insurance (amended). Photo: Quochoi.vn

On October 23, continuing the 10th Session, the National Assembly heard a report on the draft Law on Deposit Insurance (amended).

Presenting the report, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong stated that the core purpose of the draft law is to create a complete and clear legal corridor, strengthening the "shield" for the Deposit Insurance Organization (DII) to better protect the interests of depositors, while ensuring the stability of the credit institution system, security and social safety.

The Government 's submission clearly states that the viewpoint of law-making closely follows the principle of inheriting relevant regulations and overcoming shortcomings and limitations through practical implementation.

Ensure consistency with other legal regulations (such as the Law on Credit Institutions) and refer to international experience on the basis of suitability with Vietnamese practice.

The review report of the National Assembly's Economic and Financial Committee also approved the need to develop the Law on Deposit Insurance (amended) and assessed that the draft Law basically meets the requirements.

However, the Committee also requested the Drafting Agency to review and complete the draft, especially to more carefully assess the resources and conditions to ensure law enforcement - a key factor to ensure feasibility.

Notably, the Government adds important rights and obligations to the Deposit Insurance Organization, including: the right and obligation to inspect credit institutions participating in Deposit Insurance according to the plan of the State Bank; adds special borrowing rights from the State Bank and the right to borrow and receive support from the state budget, credit institutions or other organizations with Government guarantees.

The Economic and Financial Committee recommends that the Government clarify the legal value of the inspection results conducted by the Deposit Insurance Organization and strengthen the information sharing mechanism and coordination with other inspection and supervision agencies.

Clearly distinguish the cases and conditions under which the Deposit Insurance Organization is allowed to receive support from the budget or special loans from the State Bank, ensuring compliance with the process of preparing and allocating the state budget .

At the same time, clearly distinguish the tasks and powers of the Deposit Insurance Organization and the Cooperative Bank of Vietnam in arranging personnel to participate in the management and operation of people's credit funds.

This draft law focuses on flexibility in deposit insurance fees, payments and insurance limits. Accordingly, the Governor of the State Bank of Vietnam is assigned to prescribe fee levels and apply uniform or differentiated fees (based on risk) in accordance with the characteristics of the credit institution system in each period.

At the same time, it adds a provision to temporarily postpone the payment of deposit insurance premiums for credit institutions under special control. The draft also adds a provision that the Governor of the State Bank decides on the ceiling limit (equal to the entire deposit amount) in "special cases" to ensure system safety and social order and safety.

With this content, the Economic and Financial Committee recommends that the regulation of deposit insurance premiums needs to be carefully studied to ensure stable revenue but still be consistent with the financial capacity of credit institutions.

There needs to be a roadmap for calculating social insurance premiums that differentiate based on risk levels and specify criteria for evaluating and classifying credit institutions.

At the same time, clarify the basis for determining "special cases" for over-limit payments and study a transparent approval process with the participation of the State Bank and the Ministry of Finance; the policy of temporarily postponing fee payments for specially controlled credit institutions must be included in the restructuring plan approved by competent authorities.

Source: https://laodong.vn/thoi-su/bao-ve-toi-uu-quyen-loi-nguoi-gui-tien-va-on-dinh-he-thong-tai-chinh-1596650.ldo