The Law on Deposit Insurance should be amended to give the Deposit Insurance of Vietnam (DIV), a non-profit state financial organization, more independence in managing risk at credit institutions, according to Deputy Prime Minister Vuong Dinh Hue.

By the end of May, the DIV had monitored more than VND 3,000 trillion (USD 134.5 billion) worth of deposits at 1,252 deposit service providers, comprising 92 commercial and co-operative banks, 1,156 people’s credit funds, and three micro-financial organizations, Chairman of the DIV board of directors Nguyen Quang Huy said.

The DIV’s total capital was VND 30.68 trillion, including VND 5 trillion of charter capital. More than 99 percent of the idle capital was invested in government bonds.

Deputy PM Vuong Dinh Hue. Photo: chinhphu.vn

The DIV has so far compensated 1,793 people who had saved money in 39 dissolved credit funds.

Deputy Finance Minister Tran Van Hieu said the DIV was initially tasked with dealing with bankrupt credit funds. Its total asset value now exceeds VND 30 trillion, so the DIV should take on more responsibilities.

Deputy PM Hue said the DIV was an important institution, but it had not engaged in the restructuring of the banking and credit systems. At present, it is only able to pay compensation to small credit organizations that go bankrupt.

He told the DIV to clarify its role in bank restructuring and bad debt settlement in the development strategy.

Within the next two months, international organizations would submit an official consultation plan to the Vietnamese government, in which they would suggest revisions to the Law on Deposit Insurance so that the DIV could actively take part in bank restructuring, he said.

Source: VNA