Do microfinance organizations have to engage in deposit insurance for deposits of individuals in Vietnam?

Do microfinance organizations have to engage in deposit insurance for deposits of individuals in Vietnam?

In Article 4 of Decree 68/2013/ND-CP stipulating organizations engaging in deposit insurance, according to which:

1. Organizations engaging in deposit insurance are credit institutions, foreign banks’ branches which receive deposit of individuals, including commercial banks, cooperative banks, People’s credit funds and foreign banks’ branches established and operating in accordance with law on credit institutions.

2. Microfinance organizations must engage in deposit insurance for deposits of individuals including voluntary deposits of microfinance clients, excluded compulsory saving deposit in accordance with regulation of microfinance organizations.

3. Policy banks do not have to engage in deposit insurance.

Thus, with this regulation in Vietnam, when an individual deposits money in a microfinance organization, the microfinance organization must participate in deposit insurance for deposits of individuals, including voluntary deposits of microfinance clients, excluded compulsory saving deposit in accordance with regulation of microfinance organizations.

What is information provision of the State bank of Vietnam to the deposit insurers?

Pursuant to Article 10 of Decree 68/2013/ND-CP stipulating information provision of the State bank of Vietnam to the deposit insurers, as follows:

1. The deposit insurers are allowed to access information data of the State bank of Vietnam about organizations engaging in deposit insurance for implementing tasks as prescribed in Article 13 of the Law on deposit insurance.

2. Information allowed to access from information data of the State bank is specified as follows:

a) Some report norms under the report and statistical regime of the State bank of Vietnam;

b) Financial statement of organizations engaging in deposit insurance;

c) Information about grant of permit, withdrawal of permit for establishment and operation of credit institutions, permit for establishment of foreign banks’ branches; information about temporary suspension of receiving deposit applicable to organizations engaging in deposit insurance;

d) Information about division, separation, consolidation, merger, dissolution, bankruptcy of organizations engaging in deposit insurance;

dd) Information about special control of organizations engaging in deposit insurance as prescribed by law on special control applicable to credit institutions;

e) Other information in accordance with regulation of the State bank of Vietnam in each period.

3. The State bank of Vietnam shall guide specifically about content of information and method of accessing to information of the deposit insurers.

Thus, the provision of information by the State Bank of Vietnam to the deposit insurance organization shall comply with the above provisions.

What are regulations on the premium paid in case many people jointly own the insured deposits in Vietnam?

According to Article 25 of the Law on Deposit Insurance 2012 stipulates paid premium, according to which:

1. The premium paid to all insured deposits of a person at an deposit insurance participating organization including the principal and interest maximally equal to the limit of premium payment prescribed in Article 24 of this Law.

2. The premium paid in case many people jointly own the insured deposits is defined as follows:

a) The premium paid to all insured deposits of many people jointly owning at a deposit insurance participating organization the principal and interest maximally equal to the limit of premium payment paid to one person prescribed in Article 24 of this Law. The premium paid will be divided by agreement of the co-owners; in case there is no agreement or no agreement reached between the co-owners, the settlement shall apply the provisions in accordance with the law;

b) Where one of the co-owners has other insured deposit accounts at the same deposit insurance participating organization, the total amount paid to a co-owner shall not exceed the limit of premium payment;

3. Where the insured person has a debt at the deposit insurance participating organization, the insured deposit is the remaining amount after deducting that debt.

Therefore, the paid premium will be paid in case many people jointly own the insured deposits specified above in Vietnam.

Best Regards!