Vietnam Deposit Insurance

As a state financial institution with the function of protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of the credit institution system, ensuring the safe and healthy development of banking activities, the Deposit Insurance of Vietnam has actively operated, promoted its role, and achieved certain achievements.

BHTGVN helps strengthen depositors' confidence

In the context of increasingly deep international integration, the Vietnamese Dong is easily affected by fluctuations in strong foreign currencies. Currently, the Vietnam Deposit Insurance (VID) is insuring deposits in Vietnamese Dong. This is also one of the factors contributing to anti-dollarization and enhancing confidence in the national currency. In addition, the financial market operates at a fast pace, with large volumes, and the number of banks merging and converting may increase, causing depositors to feel worried. The fact that the Vietnam Deposit Insurance protects individual deposits at participating institutions with a reasonable limit has created peace of mind, contributing to promoting the capital mobilization process, preventing sudden withdrawals that threaten the liquidity safety of banks.

Contribute to maintaining system security

Accordingly, the Deposit Insurance is an effective policy tool of the State Bank and the Government . Through the activities of monitoring and inspecting the activities of organizations participating in the Deposit Insurance, the Deposit Insurance of Vietnam detects signs of risks, weaknesses, violations of regulations on deposit insurance and safety in banking activities, thereby proposing and recommending appropriate solutions or reporting to the State Bank for handling measures. In recent years, the Deposit Insurance of Vietnam has strengthened its inspection, monitoring and early warning activities.

Encourage fair competition among credit institutions

In the race for customer market share, the competitive advantage usually belongs to the big banks. However, with the presence of the deposit insurance policy, that gap has been gradually shortened, because the role of the deposit insurance in Vietnam is to contribute to ensuring the safety of the system, not just for a single credit institution. That is what creates equality in competition between credit institutions.

The deposit insurance policy contributes to enhancing the reputation of credit institutions. The presence of the Vietnam Deposit Insurance has concretely demonstrated the commitment of the Vietnamese Government in protecting depositors. Participation in the deposit insurance helps increase the reputation of credit institutions, making Vietnamese credit institutions increasingly modern and operating healthily.

Along with that, BHTGVN has developed a model of BHTG in accordance with international practices. Currently, more than 100 countries in the world have established BHTG systems. In recent times, BHTGVN has actively implemented the "Basic principles for developing effective BHTG systems" developed by the International Association of Deposit Insurers (IADI), thereby gradually meeting international standards. This has helped to enhance the reputation of the Vietnamese banking system and increase the ability to attract foreign investment.

In addition, on December 20, 2022, Deputy Prime Minister Le Minh Khai signed Decision 1660/QD-TTg approving the Deposit Insurance Development Strategy to 2025, with a vision to 2030. In particular, it sets out for the Vietnam Deposit Insurance the goals and solutions to improve the quality and efficiency of operations in accordance with international practices and the provisions of Vietnamese law.

Up to now, the Vietnam Deposit Insurance Corporation is protecting about VND8 million billion of depositors' deposits at 1,280 participating organizations. After 24 years of operation, the Vietnam Deposit Insurance Corporation has paid out to 39 people's credit funds with 1,793 depositors, with a total payment of nearly VND27 billion. The timely payment of insurance money has demonstrated the role of the Vietnam Deposit Insurance Corporation in protecting the legitimate rights of depositors, creating public trust, and contributing to preventing the impact of a chain collapse in the banking system.

Mr. Vu Van Long - Deputy General Director in charge of operations of BHTGVN - said that after 24 years of operation, the role and authority have been increasingly expanded. BHTGVN is striving to perfect its strategic goals, accompanying credit institutions to take advantage of opportunities, overcome challenges to continue to innovate in all aspects of operation.

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