Increasing the payment limit must depend on the payment capacity of the deposit insurance fund.

Raise the deposit insurance payment limit to suit reality

On the afternoon of November 14, continuing the 10th Session, the National Assembly discussed in the hall and gave opinions on the draft Law on Deposit Insurance (amended).

Regarding the insurance payment limit, the draft law does not provide a specific number as in the current law (125 million VND) but stipulates that the Governor of the State Bank shall prescribe a specific level in each period.

Delegate Hoang Thi Doi ( Son La ).

Delegate Hoang Thi Doi (Son La) said that the current insurance payment limit of 125 million VND is quite low compared to the actual banking operations; it is no longer suitable for the scale of deposits and income of the people. Therefore, the delegate suggested that after the Law is promulgated, the State Bank can increase the insurance payment limit.

However, the payment limit prescribed in each period cannot be too high and cannot protect all depositors. Delegates proposed to increase the deposit insurance payment level to 200-250 million VND.

Clause 2, Article 22 of the draft Law stipulates that in special cases, the Governor of the State Bank of Vietnam decides on the limit of payment exceeding the limit, up to the total insured deposits of the depositor.

Some opinions say that the regulation as a special case will lead to the understanding that when a large-scale credit institution of systemic importance (such as a commercial bank) fails, the deposit insurance organization will be fully paid. Meanwhile, depositors at small-scale People's Credit Funds operating in mountainous areas, difficult and especially difficult areas also need to enjoy this mechanism.

Similarly, delegate Thai Quynh Mai Dung, full-time member of the National Defense, Security and Foreign Affairs Committee, also said that the insurance limit of 125 million VND is low and not suitable for the scale of deposits and income of the people.

No specific limit was proposed, but delegates suggested adding bases for the Governor of the State Bank to decide on the insurance payment limit, to ensure transparency and stability in the operation process. The specific bases are: average income per capita, the value of deposits of the majority of people, financial capacity and the size of the deposit insurance fund...

Governor of the State Bank of Vietnam Nguyen Thi Hong further explained some of the contents raised by the delegates.

Explaining this issue in the discussion session this afternoon, State Bank Governor 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. These criteria may change from time to time and the draft law assigns the State Bank to regulate the deposit insurance limit to increase initiative, flexibility and suitability with reality.

Only increase deposit insurance premiums in special cases

Regarding deposit insurance fees, the draft law currently stipulates the same deposit insurance fee level among commercial banks. However, many National Assembly deputies believe that the risk level of banks is the same, so the State Bank should issue a ranking to apply separate fees depending on the risk level of each bank. This will encourage credit institutions to improve risk management.

In addition, the draft Law also stipulates that in case the Operational Reserve Fund is not enough to pay, the deposit insurance organization will be given a special loan from the State Bank to pay; stipulates that the deposit insurance organization will develop a plan to increase deposit insurance premiums to compensate for the special loan from the State Bank...

Delegates agreed with the draft law's provisions on applying the mechanism of increasing deposit insurance premiums to compensate for special loans. Because when deposit insurance is provided by the State Bank for special loans, it is necessary for the remaining healthy credit institutions to contribute additional premiums to ensure the principle of using market resources to handle market problems, avoid mass withdrawals at healthy banks, and ensure the confidence of depositors.

However, delegate Nguyen Thanh Nam (Phu Tho) said that increasing deposit insurance premiums will directly impact the operations of deposit insurance participating organizations, increase operating costs, affect the profits of deposit insurance participating organizations, and force deposit insurance participating organizations to adjust their financial and business plans.

If the increase is not controlled or applied for a long time, it may negatively impact the operation of the deposit insurance system and the competitiveness of the entire system, creating financial pressure for deposit insurance organizations. Therefore, delegates proposed to clarify the principles, criteria for fee increase, and the application period of fee increase.

Explaining this content, Governor of the State Bank of Vietnam Nguyen Thi Hong said that the draft Law on Deposit Insurance (amended) proposes: In case the Deposit Insurance organization borrows special loans from the State Bank, the Deposit Insurance organization shall develop a plan to increase deposit insurance premiums to compensate for the special loans from the State Bank and send it to the State Bank for consideration and decision.

The Draft Law also proposes the following regulations on special loans to the State Bank: The deposit insurance organization shall develop a plan to increase deposit insurance premiums to offset the special loans; use money to repay the special loans of credit institutions, revenue from selling valuable papers held by the deposit insurance organization, from liquidating assets of credit institutions with special loans, and deposit insurance premiums to prioritize repayment of special loans to the State Bank.

"The fee increase will only be implemented in special cases and when the operational reserve fund is not enough to pay deposit insurance, and a special loan must be taken from the State Bank to pay depositors. This is to prevent the risk from spreading and to best ensure the interests of depositors," the Governor affirmed.

Source: https://baodautu.vn/tang-han-muc-chi-tra-phai-tuy-thuoc-tha-nang-chi-tra-cua-quy-bao-hiem-tien-gui-d434254.html