Vietnam targets high depositor insurance coverage

HANOI: The government aims to increase the ratio of fully insured depositors out of total insured depositors to 92% to 95% by 2025 to align with international practices.

Under the strategy for deposit insurance development until 2025, with a vision towards 2030, the government aims to ensure 45% of depositors understand the core contents of the deposit insurance policy by 2025 and raise this percentage to 50 by 2030.

It intends to reduce the insurance payment deadline to 30 days by 2025 and 15 days by 2030 to allow depositors quicker access to their deposits when the insured institution is resolved.

According to the strategy, the charter capital of a deposit insurance organisation will be increased to 10 trillion dong by 2025 and 15 trillion dong by 2030.

Pham Bao Lam, chairman of the board of directors of Deposit Insurance of Vietnam (DIV), stated that the strategy is designed to protect the legitimate rights and interests of depositors, actively contribute to maintaining the stability of the system of credit institutions and foreign bank branches, and ensure the safe and robust development of banking activities.

Additionally, he mentioned, it enhances the quality and effectiveness of deposit insurance activities, including issuing deposit insurance participation certificates, reporting information, supervision, examination, involvement in special control, detection and early warning of potential risks to insured institutions; engagement in effective restructuring of weak insured institutions; calculation and collection of deposit insurance premiums.

The strategy aims to bolster the financial strength of the deposit insurer, affirm the state’s commitment and enhance depositors’ trust in the deposit insurance policy.

To achieve the strategic goals, Lam emphasised the necessity to amend and supplement the Law on Deposit Insurance and its guiding documents, and to refine the financial regulations for the deposit insurer.

This is crucial not only for deposit insurance activities specifically but also for fortifying the legal framework of the financial and banking industry as a whole.

Furthermore, the DIV will continually enhance the efficiency of its operations, which includes promoting digital transformation, applying modern information technology to all professional deposit insurance activities; and implementing a reporting information system to ensure comprehensive and accurate information.

The DIV will also seek to bolster its financial capability through measures such as proposing to increase charter capital, diversifying its capital portfolio, and securing loans from the State Bank of Vietnam to affirm the state’s commitment and boost depositors’ confidence in the deposit insurance policy.

The DIV protects deposits at 1,283 insured institutions, including 97 banks and foreign bank branches. — Viet Nam News/ANN