Proactive empowerment
According to State Bank Governor Nguyen Thi Hong, the 2012 Deposit Insurance Law has played a certain role after more than 12 years of implementation, but many regulations have revealed limitations and are not suitable for the development of the financial market and the requirements for risk handling in the banking system.
Specifically, the current deposit insurance premium mechanism is not flexible, does not encourage credit institutions to operate safely; payment limits are low; compensation time is slow; while the deposit insurance organization is still mainly "post-auditing", and does not have tools to intervene early when risks arise.
The Law on Credit Institutions (amended) 2024 has expanded the concepts of "early intervention" and "special control", requiring the participation of the Deposit Insurance in the supervision and restructuring of weak credit institutions. Therefore, this amendment to the law to synchronize with new regulations and increase the authority of the Deposit Insurance of Vietnam is very urgent.
Lawyer Nguyen Thanh Ha, Chairman of SBLAW Law Firm, assessed that the most breakthrough point of the draft is to give proactive authority to the deposit insurance organization in managing systemic risks.
"Previously, Deposit Insurance only appeared after the bank became insolvent, that is, to deal with the consequences. The new draft allows this organization to participate early, as soon as the bank shows signs of abnormality, to coordinate monitoring, warning and supporting restructuring," commented Lawyer Nguyen Thanh Ha.
According to the draft, the Deposit Insurance Organization can participate in developing and appraising restructuring plans, assigning personnel to participate in operating specially controlled people's credit funds, purchasing long-term bonds of credit institutions receiving compulsory transfers or making special loans to organizations participating in deposit insurance.
"These powers help the deposit insurance organization not only be a 'payer when there is a risk' but also become an important link in the banking crisis prevention network, approaching the regulatory standards of the Deposit Insurance Law in developed countries," the lawyer analyzed.
Regarding participation in the restructuring process of weak credit institutions in Vietnam, Mr. Dang Duy Cuong, General Director of the Deposit Insurance of Vietnam, said that although the Law on Credit Institutions 2024 assigned the Deposit Insurance of Vietnam the task of providing special loans to support weak institutions, it has not yet clearly defined the capital source and the method of handling risks for special loans that cannot be recovered. This draft Law on Deposit Insurance will therefore specify those contents, ensuring feasibility when implemented.
Mechanism associated with risk level
To increase the autonomy not only in risk management but also in financial operations, the draft mentions a more flexible fee mechanism. Accordingly, one of the notable new points in the Draft Law is the regulation of uniform or differentiated fee levels depending on the specific characteristics of each stage.
According to Lawyer Nguyen Thanh Ha, in case the insurance premium increases, the more deposits the bank mobilizes, the larger the fee will be. This will more or less affect the bank's business results, especially for small banks with limited financial capacity, and operating costs will increase. However, in the long term, this mechanism will encourage the market to operate more transparently, because credit institutions that want to reduce fees are forced to improve their credit rating and risk management capacity.
In addition, the draft also allows for the temporary suspension of fee payments for credit institutions under special control, to support financial recovery while still ensuring repayment obligations.
The Draft Law also stipulates shortening the time for paying insurance money to depositors from 60 days to 30 days from the date the obligation arises, and at the same time raising the payment limit from 125 million VND/person at an organization currently to a level suitable to reality as prescribed by the Government .
"Shortening the payment period is a very important change, because people only truly believe in the system when they see their rights are protected promptly. A day of delay in payment can cause widespread panic. Reducing it to 30 days is a strong signal of commitment to protecting depositors," said Lawyer Ha.
According to the lawyer, the limit adjustment is also in line with the general trend: "If calculated based on average income and deposit size of people, the current level of 125 million VND is quite outdated. Raising the limit will reflect the true value of insurance and encourage people to deposit money through official channels instead of hoarding or investing at risk."
Increase financial capacity
To fulfill a larger role, not only paying but also early intervention and special lending, the draft allows the Deposit Insurance of Vietnam to expand its investment activities, such as purchasing government bonds, deposit certificates or long-term bonds of state-owned commercial banks, as well as depositing money at safe credit institutions. However, the draft also clearly stipulates that the State Bank will strictly control investment limits and procedures to avoid risks.
In addition, the draft law also adds regulations on risk reserve capital, special borrowing mechanisms from the State Bank and repayment principles, ensuring that the Vietnam Deposit Insurance has sufficient payment capacity in the event of a major incident while still maintaining financial sustainability.
Lawyer Nguyen Thanh Ha commented: "The draft Law on Deposit Insurance clearly demonstrates the spirit of proactiveness, early prevention and protection of people's interests. When the law is passed, the Vietnam Deposit Insurance Organization will have enough tools to become the 'gatekeeper of trust' of the financial system."
Mr. Dang Duy Cuong said that the contents of this amendment are of key significance in improving enforcement effectiveness, while ensuring consistency with the Law on Credit Institutions 2024 and approaching international standards on depositor protection.
Mr. Cuong hopes that when passed by the National Assembly , the Law on Deposit Insurance (amended) will become an important step in perfecting the legal framework for the operation of the Deposit Insurance of Vietnam, helping this agency to be more proactive in monitoring, early warning and handling system risks. Thereby, the confidence of depositors will be strengthened, contributing to ensuring the safety of the banking system.
Source: https://baotintuc.vn/tai-chinh-ngan-hang/tang-quyen-giam-sat-va-can-thiep-som-cho-bao-hiem-tien-gui-20251022132309745.htm
Comment (0)