Deposit insurance agency urged to set greater role in bad debts handling

Thursday, 2016-08-11 11:57:22
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Deputy PM Vuong Dinh Hue urges the Deposit Insurance of Vietnam to make greater contribution to banking system restructuring and handling bad debts during a working session with the institution in Hanoi on August 10. (Credit: VGP)
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NDO – The strategic development of Deposit Insurance of Vietnam (DIV) in the near future should determine its greater and more important role in restructuring the banking system tied to bad debts handling, while sticking to economic restructuring in general

Deputy Prime Minister Vuong Dinh Hue made the above suggestion during a working session with DIV in Hanoi on August 10.

Reporting on the agency’s operation to the government official, Chairman of chairman of the board of directors of DIV Nguyen Quang Huy said that it has made significant progress in recent years during implementation of tasks assigned in the Deposit Insurance Law.

DIV has positively performed the task of protecting the legitimate rights and interests of depositors, contributing to maintaining the stability of credit institution systems and ensuring the healthy development and safe operation of banking sector.

As of May 31, DIV has kept track of more than VND3,000 trillion (US$135 billion) from depositors at 1,252 insured institutions, including 92 commercial and co-operative banks, 1,156 people’s credit funds and three macro-financial organisations.

Its total assets by the end of May reached over VND30.6 trillion, up 15% compared to 2015. More than 99% of temporarily idle funds have been invested in government bonds.

Deputy PM Hue praised development and performance by DIV in recent years, urging for the agency’s greater contribution to restructuring of credit institutions and the banking system, while actively participating in resolving bad debts and economic restructuring.

The government official also agreed with proposal raised at the meeting to revise the Deposit Insurance Law to facilitate the role of DIV to become more independent in risk control of credit institutions and assisting the government to make use of DIV resources to perform restructuring of weak credit institutions and handling bad debts.

The deputy PM also agreed to assign the State Bank of Vietnam to consider increase the limit of deposit insurance coverage to suit actual requirements, thus improving depositors’ confidence in credit institutions.