Better protection of depositors' rights and ensuring the stability of the credit system

On the morning of October 23, under the direction of Vice Chairman of the National Assembly Vu Hong Thanh, the National Assembly worked in the Hall, listening to the presentation of the Submission and the Report on the examination of the draft Law on Deposit Insurance (amended).

Vice Chairman of the National Assembly Vu Hong Thanh chaired the meeting. Photo: Quang Khanh

The Governor of the State Bank will decide on the same level of deposit insurance fees or differentiate the fees.

Briefly presenting the draft Law on Deposit Insurance (amended), Governor of the State Bank Nguyen Thi Hong said that the draft Law was built to create a complete and clear legal corridor for the deposit insurance organization (DIA) to better protect the rights of depositors, ensuring the stability of the credit institution system, security and social safety.

The development of the Law on Social Insurance (amended) closely follows and fully institutionalizes the Party's guidelines and policies; the State's policies; 5 policies approved by the Government ; inherits regulations that are still suitable for practice and overcomes shortcomings and limitations through the implementation of the Law on Social Insurance 2012. The development of the Law on Social Insurance (amended) ensures consistency with other legal regulations; and refers to the experiences of other countries on the basis of suitability with practice in Vietnam.

Governor of the State Bank Nguyen Thi Hong briefly presented the Draft Law on Deposit Insurance (amended). Photo: Pham Thang

Pointing out the new points of the draft Law, the Governor of the State Bank said that the draft Law amends and supplements a number of regulations to simplify procedures and increase the operational efficiency of the Deposit Insurance organization, such as amending and supplementing regulations on granting and revoking Certificates of participation in Deposit Insurance in the direction that the Deposit Insurance organization automatically grants and revokes Certificates immediately after the State Bank or competent authorities grant or revoke the Operating License of the organization participating in Deposit Insurance.

And, in order to have a basis for applying a flexible fee mechanism and ensuring a stable source of deposit insurance fee revenue, the draft Law assigns the Governor of the State Bank to prescribe deposit insurance fee levels, the application of uniform deposit insurance fees or differentiated fees in accordance with the characteristics of the Vietnamese credit institution system in each period.

National Assembly deputies attending the meeting. Photo: Quang Khanh

For credit institutions under special control, the draft Law supplements regulations on the temporary suspension of payment of social insurance premiums arising before the time of being placed under special control. Credit institutions are responsible for developing a plan to repay the temporarily suspended amount in the restructuring plan.

The Draft Law also stipulates the time when the obligation to pay insurance money arises from one of the following times: The bankruptcy plan of the credit institution is approved or the State Bank has a document confirming that the foreign bank branch is unable to pay deposits to depositors; The State Bank has a document suspending the deposit-taking activities of a credit institution under special control when the credit institution has accumulated losses greater than 100% of the value of its charter capital and reserve funds according to the most recent audited financial report.

National Assembly deputies attending the meeting. Photo: Quang Khanh

In addition, the time of insurance payment obligation also arises from the payment case to ensure system safety and social order and safety. "The addition of the time of deposit insurance payment is to handle difficulties and problems in using the deposit insurance organization's operational reserve fund", State Bank Governor Nguyen Thi Hong emphasized.

Regarding investment activities of the deposit insurance organization, the draft Law inherits and supplements safe investment forms, including buying and selling bonds, deposit certificates or depositing money at commercial banks with state capital or with state-owned enterprise capital of over 50%.

Fully assess the risks involved in expanding investment activities.

Briefly presenting the Report on the review of the draft Law, Chairman of the Finance and Budget Committee Phan Van Mai said that the Committee agreed with the necessity of developing the Law on Deposit Insurance (amended). The draft Law dossier basically meets the requirements of the Law on Promulgation of Legal Documents, however, the time for submitting the dossier is still slow. The Economic and Finance Committee also requested the drafting agency to continue reviewing and perfecting the draft Law, ensuring its conformity with the Party's policies and viewpoints, ensuring its constitutionality, legality, and consistency with the legal system; at the same time, it is necessary to more carefully assess the resources and conditions to ensure the implementation of the Law.

Regarding the deposit insurance fee (Article 19), the Economic and Financial Committee basically agrees with the provisions of the draft Law, and at the same time, recommends that the regulation of deposit insurance fee levels must be carefully studied, both to ensure stable revenue sources for deposit insurance organizations to effectively implement this policy and to be consistent with the financial capacity of organizations participating in deposit insurance.

Chairman of the Finance and Budget Committee Phan Van Mai presented a summary of the Review Report of the draft Law. Photo: Ho Long

In addition, the Chairman of the Economic and Financial Committee stated that it is necessary to regularly review and have a roadmap for calculating deposit insurance fees based on the assessment and classification of deposit insurance participating organizations, specifying the criteria for assessing and classifying credit institutions, methods of measuring risks, and methods for calculating deposit insurance fees based on the level of risk; it is necessary to stipulate and clarify that the collection of fees to offset the deficit of the Operational Reserve Fund is only carried out in special cases that affect the system, limiting the cases where deposit insurance organizations have to borrow special loans from the State Bank. And, it is necessary to clearly stipulate the limit of fee increase, the time limit for fee increase in accordance with the plan to offset special loans from the State Bank and return to the normal fee level immediately after that.

Regarding investment activities (Article 29), the Economic and Financial Committee recommends identifying and fully assessing the risks involved when expanding investment activities, developing plans to prevent, control and manage risks, analyzing and evaluating the efficiency of capital use when expanding investment activities, and forming capital preservation mechanisms, ensuring liquidity and safety for investment activities.

Source: https://daibieunhandan.vn/bao-ve-tot-hon-quyen-loi-nguoi-gui-tien-va-bao-dam-su-on-dinh-cua-he-thong-tin-dung-10392540.html