Which organization is entitled to deposit insurance when saving money in Vietnam?

Which organization is entitled to deposit insurance when saving money in Vietnam?

According to Article 6 of the Law on Deposit Insurance 2012, regulations on deposit insurance participation are as follows:

1. The foreign credit organizations and banking branches are entitled to receive the deposits of individuals must participate in deposit insurance, except for the case prescribed in clause 2 of this Article.

2. The policy bank do not have to participate in deposit insurance.

And in Article 4 of Decree 68/2013/ND-CP stipulating on organizations engaging in deposit insurance as follows:

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, credit institutions and foreign bank branches, excluding policy banks, which receive savings deposits from individuals, must participate in deposit insurance in Vietnam. These organizations must be established and operate in accordance with the Law on Credit Institutions.

What is arising time of obligations of premium payment in Vietnam?

Pursuant to Article 22 of the Law on Deposit Insurance 2012, arising time of obligations of premium payment is 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

According to Article 8 of Circular 24/2014/TT-NHNN, time of incurred obligation to claim insurance coverage as follows:

1. Obligation to pay the insurance coverage shall be incurred from the time when the State Bank issues written notification to cancel the special control, to terminate or refuse the application of measures to regain the solvency after which the insured credit institutions are still in danger of insolvency, or when the State Bank issues a written confirmation to determine insured branches of foreign banks become insolvent to repay deposits to insured depositors.

2. The State Bank’s written notification to cancel the special control, to terminate or refuse the application of measures to regain the solvency, prescribed in Clause 1 of this Article, must clarify the insured credit institutions’ failure to regain their solvency (or in danger of insolvency) as a basis for the fulfillment of payment obligations to the insured depositors.    

According to this Article, at the time the State Bank issues a special control or document to terminate the application or documents not to apply the measures to restore the solvency for the credit organization, obligations of premium payment will arise in Vietnam.

What is order of procedures for insurance coverage claims in Vietnam?

According to Article 9 of Circular 24/2014/TT-NHNN, procedures for insurance coverage claims are guided as follows:

1. Within a period of 10 (ten) working days from the moment when obligations to pay insurance coverage are incurred, the insured institutions must send documentation to the Deposit Insurance of Vietnam to claim their insurance coverage. Documentation of the request for the insurance coverage payment must be signed by representatives of the insured institutions in accordance with regulations specified in Clause 2 of this Article, including:  

a) Written request for insurance coverage claims according to the form regulated by the Deposit Insurance of Vietnam;

b) List of insured depositors according to the form regulated by the Deposit Insurance of Vietnam, which clearly specifies the amount of insured deposits (including principal and interest) and debts of the insured institutions (if any, including principal and interest) to be paid to each insured depositor by the date on which obligations to pay insurance coverage by the insured institutions are incurred; the amount of insurance coverage to be paid to each insured depositor.

c) A copy of the State Bank’s written notification to cancel the special control, to terminate or refuse the application of measures to regain the solvency or a written confirmation to determine the insolvency of insured branches of foreign banks to repay deposits to insured depositors in accordance with regulations specified in Article 8 of this Circular.

2. Legal representatives of insured institutions must follow procedures for insurance coverage claims:

a) After the State Bank issues written notification to cancel the special control, to terminate or refuse the application of measures to regain the solvency after which the insured credit institutions are still in danger of insolvency, the legal representatives of insured institutions continue to be authorized to follow procedures for requesting the Deposit Insurance of Vietnam to pay the insurance coverage to the insured depositors. 

b) If the insured institutions do not have legal representatives or when necessary, the State Bank must designate an official of the insured institutions or of the State Bank as the legal representatives of the insured institutions to follow procedures for insurance coverage claims.

3. Within a period of 05 (five) working days from the full receipt of documentation to claim insurance coverage according to regulations specified in Clause 1 of this Article, the Deposit Insurance of Vietnam can proceed to examine relevant documents and records to determine the amount of insurance coverage payables.

The insured institutions are responsible to provide documents and records required by the Deposit Insurance of Vietnam to serve the purposes of examination and determination of the amount payables.

If there is any sign of violations during the examination of documents and records to determine the amount payables beyond their scope of administrative competencies, the Deposit Insurance of Vietnam must inform and petition the State Bank to consider, examine, inspect and handle these violations. 

Depending on the result of examination conducted by the Deposit Insurance of Vietnam and documentation of insurance coverage claim submitted by the insured institutions, the Deposit Insurance of Vietnam shall compile a list of insured depositors and the amount of insurance coverage paid to each insured depositor.

4. Within a period of 10 (ten) working days from the completion date of examination according to the regulations specified in Clause 3 of this Article, the Deposit Insurance of Vietnam must set up the payment plan to pay the insurance coverage to insured depositors; publicly notify the information about venue, time and mode of insurance coverage payment on three successive publication of central-governed newspapers and local newspapers at the area where its main office and branches of insured institutions are located, and also on an online newspaper in Vietnam; explicitly post the list of insured depositors and the amount of insurance coverage payment at each venue mentioned above.     

The procedures for insurance coverage claims are carried out according to the above process in Vietnam.

Best Regards!