DEPOSIT INSURANCE

Deposit insurance is a measure implemented by deposit insurers to protect

depositors and contribute to ensuring safe, healthy development of the banking
system. Deposit Insurance of Vietnam (DIV) is a non-profit financial institution
established by the government. It works to bring to life party and state policies
designed to ensure social security in the field of finance and banking, which are
called deposit insurance policies. The 2012 Law on Deposit Insurance stipulates that
deposit insurance aims to protect the rights and legitimate interests of depositors,
contributing to maintaining the stability of credit institutions, as well as safe and
healthy operations of the banking system.

Along with paying insurance, DIV also provides depositors with indirect protection
through other technical operations. Specifically, it carries out monthly, quarterly and
yearly inspections at insured institutions in order to find their shortcomings and
violations of deposit insurance regulations. DIV will give warnings to insured
institutions and report to the State Bank of Vietnam. DIV also disseminates
information to make the public and insured institutions aware of deposit insurance
policies.

When National Assembly deputies discussed draft amendments and supplements to

some articles of the Law on Credit Institutions, State Bank of Vietnam Governor Le
Minh Hung said under the government’s guidance, it is necessary to carefully assess
the impact of bankruptcy on the safety of the entire system, as well as the risks it
may cause for the entire economy, in order to protect the rights and legitimate
interests of depositors. The government and the State Bank of Vietnam wish that the
National Assembly will consider raising the VND75 million deposit insurance
coverage limit in specific cases depending on actual budget conditions.

DIV will not use the state budget but other state financial resources to implement its
tasks.

DIV has been assigned to implement deposit insurance policies. It is a member of

the national financial safety net, and one of the government’s tools to protect
depositors and maintain system safety. Other tools include macroeconomic policies.
The central bank plays the role of a “lender of last resort” to help improve the
solvency of credit institutions, while at the same time monitoring banking operations
and tax policies to ensure safety and efficiency of the banking system.

Taks and Responsibilities

MANDATES
1. The Deposit Insurance of Vietnam is a legal entity, operates for non-profit purposes in order to
protect legitimate rights and interests of depositors, to implement deposit insurance policies,
contributing to maintaining stability of credit institutions and ensuring safe and sound
development of the banking activities.
2. The Deposit Insurance of Vietnam operates in principles of ensuring the safety of its capital
and covering its expenses by itself. The Deposit Insurance of Vietnam has a legal entity, an
independent accounting, a seal and an account under Vietnamese law.
3. The Deposit Insurance of Vietnam is exempted from all taxes according to the provisions of
law.
4. The Ministry of Finance shall assume the prime responsibility for the financing regime of the
Deposit Insurance of Vietnam in coordination with the State Bank of Vietnam as stipulated by the
applicable legal regulations.
Specific tasks and Authorities
1. To build a deposit insurance development strategy for the State Bank of Vietnam to submit to
the Prime Minister for approval and to implement upon the approval.
2. To recommend the State Bank of Vietnam and authorized State bodies to issue or amend,
supplement, replace, cancel, repeal or suspend legal documents relating to deposit insurance
activities.
3. To grant, re-grant and revoke certificates of deposit insurance participation.
4. To require insured institutions to periodically or ad hoc provide information on insured
deposits.
5. To provide information to the State Bank of Vietnam and vice versa to access to and exchange
information with the State Bank of Vietnam.
6. To calculate and collect deposit insurance premiums from insured institutions in accordance
with the provisions of this Law.
7. To manage, use and preserve the deposit insurance funds.
8. To make deposit insurance payouts to insured depositors in accordance with the provisions of
the Law on Deposit Insurance and related legal documents.
9. To monitor and examine the compliance with legal regulations on deposit insurance; to make
recommendations to the State Bank of Vietnam in dealing with actions violating legal regulations
on deposit insurance.
10. To collect, analyze and process information on insured institutions in order to detect and
report to the State Bank of Vietnam so that it can, in a timely manner, deal with violations of the
prudential regulations on banking operations and risks causing insecurity to the banking system.
11. To ensure the confidentiality of deposits and documents relating to deposit insurance of
insured institutions as legally stipulated.
12. To receive assistance in the principle of reimbursement from the State budget pursuant to the
Prime Minister decisions or to borrow from credit institutions, other institutions under guarantee
of the Government in case the operational fund of the deposit insurance organization is
temporarily not adequate for paying insurance; to receive assistance from local and foreign
organizations and individuals to enhance operational capacity.
13. To participate in the process of special control over insured institutions as stipulated by the
State Bank of Vietnam; to participate in the management and liquidation of assets of insured
institutions as regulated by the provisions of law.
14. To organize public awareness activities regarding policies and legislations on deposit
insurance; to organize training courses on deposit insurance, research into applied science,
technology and management methods in compliance with the development needs of the deposit
insurance organization.
15. To make commitments to insured institutions and other commitments under the
responsibilities of the Deposit Insurance of Vietnam.
16. To make renovation, modernization of technology and method of management in accordance
with the development requirements of the Deposit Insurance of Vietnam.
17. To implement obligations for employees in accordance with provisions of law; to recruit, hire,
arrange, provide training of human resources, select ways of salary, wage and bonus payment
as stipulated by provisions of law.
18. To legally receive, manage and use the charter capital; supplementary fund; land and other
resources  from the State in accordance with provisions of law.
19. To transfer, hire, mortgage or pledge assets under authorized management in accordance
with provisions of law.
20. To cooperate with domestic and foreign organizations in order to enhance its operational
capacity and the capacity of insured institutions.
21. To be examined, inspected, supervised by the State Bank of Vietnam and authorized State
agencies as legally regulated.
22. To carry out other operations as permitted by the Prime Minister or the Governor of the State
Bank of Vietnam