The draft Law on Deposit Insurance was planned to be submitted to the National Assembly at the year-end session, according to Deputy Governor of the State Bank of Vietnam Tran Minh Tuan.
Under the draft, credit and non-credit institutions that receive deposits from individuals and organizations must participate in compulsory deposit insurance and pay a deposit insurance premium fixed at the average balance of deposits insured at their institutions.
The insured include individuals, households, cooperatives, private enterprises and partnerships that have deposits in
According to economists, the law should clearly define powers of the deposit insurance organization, which is designed in the law as the Vietnam Deposit Insurance Corporation (VDIC) after the model of risk minimization. This organization should have more powers in settling crises, dealing with financial institutions in trouble, even handling their assets.
This model would allow VDIC to supervise and assess risks; apply risk-based deposit insurance premiums; deal with bankruptcy of banks; and soon and actively intervene in the operation of institutions participating in deposit insurance.
Drafters suggested that the law clarify responsibilities of participants in insurance; role of VDIC; time for VDIC to conduct inspection or examination or intervene in handling crises; and responsibilities of VDIC and the State Bank in dealing with bankruptcy of credit institutions.
Under the draft, money depositors would be protected not only directly in case insurance-participating institutions are dissolved or go bankrupt, but also indirectly and comprehensively through VDIC’s supervision of operation safety of deposit-receiving organizations for risk prevention.
Most experts expected that all individuals’ and organizations’ deposits at credit institutions must be insured and interests of these organizations and individuals be assured.
Some proposed that deposits in foreign currencies should also be insured in order to protect the interests of money depositors.
They also agreed with the “relative independence” of VDIC so that it can have autonomy and flexibility in implementing deposit insurance policies.-