If the bank goes bankrupt, how much can depositors be compensated in Vietnam?

If the bank goes bankrupt, how much can depositors be compensated in Vietnam?

Article 22 of the Law on Deposit Insurance 2012 stipulates arising time of obligations of premium payment, specifically as follows:

The obligations of premium payment arising from the time the State Bank of Vietnam sends document to terminate the special control or document to terminate the application or documents not to apply the measures to restore the solvency for the credit organization that is an deposit insurance participating organization still falls into bankruptcy or the State Bank of Vietnam has document to identify the foreign banking branch that is a deposit insurance participating organization losing the ability to make payment of deposits to the depositors

Pursuant to Article 24 of the Law on Deposit Insurance 2012 stipulating limit of premium payment

1. The limit of premium payment is the maximal amount that the deposit insurance organization shall make payment for all insured deposits of a person at a deposit insurance participating organization upon the arising obligations of premium payment

2. The Prime Minister stipulates the limit of premium payment at the request of the State Bank of Vietnam.

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

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.

In Article 3 of Decision 32/2021/QD-TTg stipulating the insurance payment limit, according to which:

The maximum amount the deposit insurance organization pays for all insured deposits in accordance with the Law on Deposit Insurance (including principal and interest) of a person at a deposit insurance participating institution when the insurance payment obligation arises, it is 125,000,000 VND (one hundred and twenty five million VND).

Thus, when you deposit money at a bank but that bank goes bankrupt, you will be covered by insurance to pay up to 125 million VND.

What are procedures for premium payment at banks in Vietnam?

Pursuant to Article 26 of the Law on Deposit Insurance 2012 stipulates procedures for premium payment, as follows:

1. Within 10 working days from the arising time of the premium payment obligation, the deposit insurance participating organization must send the dossier to request the payment of premium to the deposit insurance organization.

The dossier to request the payment of premium includes the written request of the premium payment, the list of insured persons of deposit, the deposit of each insured person and the premium to request the deposit insurance to make payment.

2. Within 05 working days after receiving complete dossiers as prescribed in Clause 1 of this Article, the deposit insurance organization shall verify the documents and books to determine the amount to be paid.

3. Within 10 working days after the end day of inspection specified in clause 2 of this Article, the deposit insurance organization must have a plan to pay a premium to the insured persons of deposit; publicly announce the location, time, mode of payment of premium on three consecutive issues of a central newspaper, a local newspaper where located the head office and the branches of the deposit insurance participating organization and on website of a Vietnamese newspaper; listing the list of insurance payees at the announced locations.

4. Upon receipt of premium, the insured persons of deposit must produce the evidencing papers of the legal ownership with respect to the insured deposits at the deposit insurance participating organization.

5. The deposit insurance organization shall directly make payment of premium to the insured persons of deposit or authorize another deposit insurance participating organization to make payment.

6. After a period of 10 years from the date the deposit insurance organization has announced the first time the payment of premium, the unclaimed premium shall be established the state ownership and added to the operating capital of the deposit insurance organization. The person who has the ownership of the insured deposit shall not have the right to request the deposit insurance organization to return that premium.

According to this Article, with this regulation in Vietnam, procedures for premium payment at the Bank shall comply with the above provisions in Vietnam.

Best Regards!