The State Bank of Vietnam is drafting the Law on Deposit Insurance (amended).
The State Bank of Vietnam said that the 12-year implementation of the Law on Deposit Insurance (DI) and its guiding documents have also raised a number of difficulties and problems that need to be resolved to further enhance the role of the DIV, so that the DIV policy can truly be effective, contributing to maintaining the stability of the credit institution system, ensuring the safe and healthy development of banking activities, such as:
(i) The rights and obligations of organizations participating in social insurance and social insurance organizations need to be amended and supplemented to comply with relevant legal documents and implementation practices.
(ii) The issue of social insurance fees needs to be revised and supplemented to overcome shortcomings in practical implementation.
(iii) The limit of insurance payment and the time of arising of the obligation to pay insurance should be regulated in accordance with and consistent with other legal documents, to better protect the legitimate rights and interests of depositors.
The insurance payment limit (the maximum insurance amount that the deposit insurance organization pays to 01 customer at 01 deposit insurance participating organization when the deposit insurance participating organization goes bankrupt) is currently 125 million VND. With this limit, the ratio of fully insured deposit balances to total insured deposit balances in Vietnam is only 8.38%, much lower than the global average of 47%; the ratio of fully insured depositors/total insured depositors of the entire system is 92.43%. However, if excluding the number of depositors with balances from 1-50,000 VND (usually inactive payment account balances), this ratio is only 87.89%, lower than the IADI recommendation of 90-95%.
(iv) The current regulations on the time of payment of insured deposits do not ensure timeliness, and there is no basis for the Vietnam Deposit Insurance to make deposit payments earlier, immediately when a credit institution experiences an event that risks causing systemic insecurity. The fact that the deposit insurance organization can only make deposit payments after a credit institution has decided to go bankrupt will not ensure the role of the Vietnam Deposit Insurance in stabilizing the psychology of depositors, preventing the risk of collapse, and best protecting the interests of depositors.
Deposit insurance is a guarantee to repay deposits to insured depositors within the insurance payment limit when the deposit insurance participating organization becomes unable to repay deposits to depositors or goes bankrupt.
In addition, on January 18, 2024, the National Assembly passed the Law on Credit Institutions. The 2024 Law on Credit Institutions amended and supplemented a number of provisions on the rights and obligations of the Vietnam Deposit Insurance to participate in the process of early intervention and special control of credit institutions. However, some contents of the Law on Credit Institutions do not provide details but refer to implementation according to the law on deposit insurance. This requires amending and supplementing the Law on Deposit Insurance to be consistent with the provisions of the Law on Credit Institutions and to have a basis for the Vietnam Deposit Insurance to effectively perform its assigned tasks, contributing to maintaining the stability of the credit institution system.
According to the State Bank, the development of the Law on Deposit Insurance (amended) aims to address difficulties and obstacles in deposit insurance activities in the past, ensuring consistency and unity with relevant laws, creating a complete and clear legal corridor for deposit insurance organizations to improve their financial capacity and participate more deeply in the process of restructuring credit institutions, thereby better protecting the rights of depositors, ensuring the stability of the credit institution system, social security and safety according to the orientation of the Deposit Insurance Development Strategy to 2025, with a vision to 2030, which has been approved by competent authorities.
The draft consists of 08 chapters and 45 articles. In addition to general provisions, the draft proposes specific provisions on the rights and obligations of insured persons, organizations participating in insured deposits, insured deposits; insured deposits activities; insured deposits organizations; information and reporting activities; inspection and complaints about insured deposits; participation in handling credit institutions that are subject to early intervention and special control; participation in handling incidents and crises...
Modifications, additions, and deletions
The draft Law proposes to amend regulations on the rights and obligations of organizations participating in deposit insurance, deposit insurance organizations, certificates of participation in deposit insurance, insured deposits, deposit insurance fees, time of arising of insurance payment obligations, insurance payment deadlines, insurance payment limits, deposit insurance organizations, capital sources, investment activities, financial regimes, accounting, bookkeeping and auditing of deposit insurance organizations.
The draft Law also proposes to supplement regulations on the Ministry of Finance 's responsibility for state management of deposit insurance, on management and investment of state capital in deposit insurance organizations, special loans, support for deposit payment to depositors, principles for handling special loans, participation in handling incidents and crises in the operations of credit institutions, and transitional provisions.
In addition, the draft Law proposes to remove some documents in the application for a Certificate of participation in the Deposit Insurance Scheme; remove regulations on the fiscal year of the Deposit Insurance Scheme; and remove regulations on insured deposits including promissory notes and treasury bills.
The State Bank said that the revised, supplemented and omitted contents of the draft Law closely follow the contents of the 05 policies of the Law on Deposit Insurance (amended) approved by the Government in Resolution No. 191/NQ-CP, including: (i) Perfecting the financial mechanism to improve the efficiency and financial capacity of deposit insurance organizations; (ii) Perfecting regulations on the rights and obligations of deposit insurance organizations; (iii) Perfecting legal regulations for the Deposit Insurance of Vietnam to participate in the restructuring process of weak credit institutions in Vietnam; (iv) Perfecting regulations on deposit insurance fees; (v) Perfecting regulations on insurance payment. In addition, the draft Law also adjusts some technical contents to ensure clarity and consistency with the practical operation of deposit insurance and related laws.
This draft is being solicited for comments on the State Bank of Vietnam's Electronic Information Portal.
Wisdom
Source: https://baochinhphu.vn/du-thao-luat-bao-hiem-tien-gui-sua-doi-102250731173418063.htm
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