On the afternoon of November 14, the National Assembly discussed and commented on the amended Law on Deposit Insurance, commented and supplemented articles on State Bank (SBV) deposit insurance for credit institutions (CIs).
After receiving the opinions of delegates, regarding deposit insurance fees, Governor of the State Bank Nguyen Thi Hong said that the deposit insurance fee mechanism in the draft law stipulates that both cases are of the same class and discrimination, each with advantages and disadvantages.
Ms. Hong said that Vietnam is currently applying a synchronous fee mechanism and when necessary conditions allow, it is possible to gradually apply a different deposit insurance fee to encourage credit institutions to operate well, which will reduce the cost of deposit insurance.
However, to comply with the legal orientation of only regulating general issues of principle, the specific contents and techniques assigned to the Government and ministries and branches to guide to ensure flexibility and suitability with reality.
Regarding the regulation on increasing deposit insurance fees to compensate for special loans from the State Bank, Governor Nguyen Thi Hong said that the fee increase is only carried out in special cases and when the professional reserve fund is not enough to pay deposit insurance but must borrow a special loan from the State Bank to pay depositors. This is to prevent risks from spreading and best ensure the rights of depositors.
Regarding deposit insurance inspection activities, the SBV, as a management agency, will clearly determine the scope and limit the inspection content of deposit insurance institutions to ensure that it does not overlap with the inspection scope of the State Bank as well as competent authorities in inspecting, examining and supervising credit institutions.
Regarding the insurance limit, according to the Governor of the State Bank, this depends on the economic situation, the average balance of insured deposits as well as the ability to pay of the deposit insurance fund.
These criteria may change from time to time and the draft law assigns the State Bank to regulate deposit insurance limits to increase proactiveness, flexibility and suitability with reality, she said.
Regarding the mechanism of insuring the entire amount of money deposited by depositors, Ms. Hong said that this is a mechanism applied by some countries to best protect depositors and prevent the phenomenon of mass withdrawals in banking operations, for example, the case of the US in the first months of 2022.
Ms. Hong said that the SBV will continue to coordinate with the National Assembly agencies and study to clarify the criteria for determining in special cases of the draft law.
Regarding procedures and insurance payment, Ms. Hong said that she will accept the opinions of National Assembly deputies to review and in the direction of providing quick, complete, accurate information as well as shortening the time.
However, the leader of the SBV said that the procedures must ensure enough time for the deposit insurance to review, especially in cases where there are complicated records.
The State Bank will consider applying technology and digital transformation in deposit insurance payment activities, said the Governor of the State Bank.
With opinions that it is necessary to strengthen the role of the Deposit Insurance of Vietnam 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 the State, with the most important goal of protecting depositors.
"Protecting depositors does not stop at paying insurance in case of bankruptcy, the provisions in the draft law also allow early and remote implementation of measures to ensure system safety. This policy is also consistent with the laws on deposit insurance of many countries, for example in the US" - the Governor said.
Using financial resources from the professional reserve fund to handle weak credit institutions, whether to pay directly to depositors or indirectly through participating in restructuring weak credit institutions, are all methods to best protect the rights of depositors.
