The amended Law on Deposit Insurance includes several important changes aimed at improving the effectiveness of depositor protection and ensuring the safety of the system. The Law comprises 8 Chapters and 41 Articles. Accordingly, the Law promotes transparency of online information by adding regulations on the form of public disclosure of participation in deposit insurance.
The law enhances the role of the deposit insurance organization in crisis management and support for credit institutions, with detailed regulations on the participation of the deposit insurance organization in early intervention, special control, and incident/crisis handling. New mechanisms include: special lending; and purchasing long-term bonds.
The principle of capital preservation in the investment activities of deposit insurance organizations has also been stipulated in Article 142 of the Law. The concretization of the principle of capital preservation in the investment activities of deposit insurance organizations and the special borrowing from the State Bank of deposit insurance organizations will be stipulated in the financial regime of deposit insurance organizations and the guiding documents of the State Bank.
Regarding the time when the obligation to pay insurance arises, the Law stipulates that the obligation to pay insurance arises from one of three points in time.
Specifically, the case in Clause 1 is when the bankruptcy plan of the credit institution is approved or the State Bank has a document determining that the foreign bank branch is unable to pay deposits to depositors; this provision is consistent with the Law on Credit Institutions. For the case of early payment, Clauses 2 and 3, Article 21 and Article 36 of the Law have determined the time, the determining agency, and the conditions for performing the obligation to pay insurance money.
In the case of Clause 2, Article 21, the payment arises when the State Bank issues a document suspending the deposit-taking activities of a credit institution under special control and that 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.
For the case in Clause 3, Article 21, the payment arises when the State Bank issues a written notice to the deposit insurance organization about the payment as prescribed in Clause 2, Article 36 of this Law. Accordingly, to ensure system safety and social order and safety as prescribed in Clause 4, Article 162 of the Law on Credit Institutions, the State Bank of Vietnam reports to the Government to decide on requesting the deposit insurance organization to make payment in case the credit institution under special control loses or is at risk of losing its ability to pay according to the law on credit institutions.
Thus, the Law has determined the role of the State Bank in issuing documents to determine the time when the obligation to pay insurance premiums arises in cases of early payment.
The law clearly stipulates the responsibility of the State Bank of Vietnam in sharing data and information about deposit insurance participating institutions with the deposit insurance organization to perform its functions and duties. Regarding state management, the law affirms that the State Bank of Vietnam is responsible for inspecting, examining, and handling violations related to deposit insurance in accordance with this law and relevant laws.
The law stipulates that within 30 days from the date a deposit insurance participating institution ceases accepting deposits or becomes insolvent, the deposit insurance organization is responsible for paying deposit insurance benefits to depositors.
After the Law is passed, the Government will direct the State Bank and relevant agencies to promptly issue guiding documents to put the Law into practice as quickly and effectively as possible. The Law will take effect from May 1, 2026.
Previously, during the discussion of the draft Law, delegates agreed to amend the Law on Deposit Insurance to overcome the limitations of the 2012 Law, especially related to protecting depositors, handling weak credit institutions and improving the effectiveness of the deposit insurance policy in the process of maintaining stability of the financial and banking system.
Representative Hoang Thi Doi (Son La) assessed that the Law has added many progressive provisions, especially those related to better protecting the legitimate rights and interests of depositors. She expressed hope that, once the Law is enacted, the State will build a mechanism to ensure the more effective operation of the deposit insurance policy, thereby increasing public confidence in the banking system.
Source: https://baotintuc.vn/chinh-polit/nang-cao-hieu-qua-bao-ve-nguoi-gui-tien-va-dam-bao-an-toan-he-thong-20251210115931354.htm
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