Governor Nguyen Thi Hong: Consider shortening the time for deposit insurance payments

On the afternoon of November 14, the National Assembly discussed and gave opinions on the amended Law on Deposit Insurance, gave opinions and additional provisions on deposit insurance of the State Bank (SBV) with credit institutions (CIs).

After receiving the delegates' opinions regarding deposit insurance fees, Governor of the State Bank of Vietnam Nguyen Thi Hong said that the deposit insurance fee mechanism in the draft law stipulates both equal and differentiated cases, each with advantages and disadvantages.

Ms. Hong said that currently, Vietnam is applying a uniform fee mechanism and when necessary conditions allow, it can gradually apply differential deposit insurance fees to encourage credit institutions to operate well, which will reduce the cost of deposit insurance.

Governor of the State Bank Nguyen Thi Hong

State Bank Governor Nguyen Thi Hong receives and explains opinions on the revised Law on Deposit Insurance. Photo: National Assembly Media

However, to comply with the legal orientation of only regulating general issues of principle, the specific and technical contents are assigned to the Government and ministries for guidance to ensure flexibility and suitability with practice.

Regarding the regulation on increasing deposit insurance premiums to compensate for special loans from the State Bank, Governor Nguyen Thi Hong said that the increase in premiums should only be implemented in special cases and when the operational reserve fund is not enough to pay deposit insurance and a special loan from the State Bank must be borrowed to pay depositors. This is to prevent the risk from spreading and to best ensure the interests of depositors.

Delegates attending the meeting. Photo: National Assembly Media

Regarding the inspection activities of deposit insurance, the State Bank, as a management agency, will clearly define the scope and limits of inspection contents of deposit insurance organizations to ensure that they do not overlap with the inspection scope of the State Bank as well as competent authorities in the inspection, examination and supervision of credit institutions.

Regarding the insurance limit, according to the Governor of the State Bank, 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 over time and the draft law assigns the State Bank to regulate deposit insurance limits to increase proactiveness, flexibility and suitability to reality,” she said.

Regarding the mechanism of insuring all depositors' money, Ms. Hong said that this is a mechanism applied by a number of countries to best protect depositors and prevent mass withdrawals in banking operations, for example, the case of the US in the first months of 2022.

Ms. Hong said that the State Bank will continue to coordinate with the National Assembly agencies and research to clarify the criteria for determining special cases in the draft law.

Regarding insurance procedures and payments, Ms. Hong said that she will take into account the opinions of National Assembly delegates to review and provide information quickly, fully, accurately as well as shorten the time.

However, the State Bank leader said that the procedure must ensure enough time for deposit insurance to review, especially in cases with complicated documents.

“The State Bank will consider applying technology and digital transformation in deposit insurance payment activities,” said the Governor of the State Bank.

Regarding the need to strengthen the role of the Vietnam Deposit Insurance in handling weak credit institutions, the Governor said that the political, legal and practical basis of this regulation is completely consistent with the innovation policy in the direction of the Party and State, with the most important goal being to protect depositors.

"Protecting depositors does not stop at paying insurance money in case of bankruptcy of credit institutions. The provisions in the draft law also allow early and remote measures to be taken to ensure system safety. This policy is also consistent with the deposit insurance laws of many countries, for example in the US," the Governor said.

Using financial resources from the operational reserve fund to handle weak credit institutions, whether to pay depositors directly or indirectly through participating in restructuring weak credit institutions, are all methods to best protect the interests of depositors.

Source: https://laodong.vn/thoi-su/thong-doc-nguyen-thi-hong-can-nhac-rut-ngan-thoi-gian-chi-tra-bao-hiem-tien-gui-1609103.ldo