Increase deposit insurance limits to protect depositors' rights

On the afternoon of November 15, under the chairmanship of National Assembly Chairman Tran Thanh Man , the National Assembly discussed the Draft Law on Deposit Insurance (amended) with the aim of strengthening the ability to protect depositors and improving the capacity of deposit insurance organizations. Many representatives gave comments and proposals on the deposit insurance payment limit, that is, the payment level in case the organization is unable to pay depositors, the risk-based fee collection mechanism and the payment period when the credit system is unstable.

The current maximum deposit insurance payment limit is 125 million VND for each individual at a credit institution. Many representatives believe that this payment level is still low, not suitable for the scale of deposits and current income. Therefore, raising the payment limit is necessary to better protect the interests of depositors, especially in the context of many fluctuations in the financial market.

Mr. Nguyen Hai Nam - National Assembly Delegate of Hue City commented: "Regarding the deposit insurance payment limit compared to the region, for example, Singapore or Malaysia, they both pay more than 1 billion. Vietnam is currently 125 million, this level is quite low compared to the region. It is recommended to increase it to create more trust in the system. The Government should stipulate a flexible adjustment mechanism, maybe once every three years."

Ms. Hoang Thi Doi - National Assembly Delegate of Son La province said: "I propose that the drafting agency study and supplement the Law with principles and bases for the Governor of the State Bank to decide on the insurance payment limit. The bases may include per capita income, the size and value of deposits of the majority of people, financial capacity and size of the deposit insurance fund, and the safety level of the credit institution system."

In addition, delegates also commented on the need to shorten the deposit insurance payment period to 7-20 days compared to the draft of 45 days.

Explaining to the National Assembly about the deposit insurance limit, Governor of the State Bank of Vietnam Nguyen Thi Hong said that this issue depends on the economic situation, the average balance of insured deposits as well as the payment capacity of the deposit insurance fund.

Ms. Nguyen Thi Hong - Governor of the State Bank of Vietnam commented: "The State Bank will direct the deposit insurance organization to review and propose appropriate deposit insurance levels. In addition, the draft Law is proposing policies for the deposit insurance organization to improve its financial capacity, thereby creating a basis for raising the deposit insurance limit, in order to better protect the interests of depositors. The decision on the payment limit exceeding the general deposit insurance limit is only applied in special cases".

Regarding procedures and insurance payments, the Governor of the State Bank said that he will review to shorten the time. Regarding deposit insurance fees, it is possible to gradually apply a mechanism for differentiating between each bank, when conditions allow, to encourage credit institutions to operate better.

Source: https://vtv.vn/tang-han-muc-bao-hiem-tien-gui-de-bao-ve-quyen-loi-nguoi-gui-tien-100251115061757513.htm