What is deposit insurance? Regulations on deposit insurance fees in Vietnam

What is deposit insurance? Regulations on deposit insurance fees in Vietnam (Internet image)

1. What is deposit insurance?

According to Clause 1, Article 4 of the Law on deposit insurance 2012, deposit insurance is a guarantee for repayment of deposits to the insured persons of deposit within the limit of premium payment when the deposit insurance participating organizations fall into the state of inability to repay deposits to the depositors or go bankrupt.

In which:

- Insured persons of deposit is an individual having deposits insured at the deposit insurance participation organizations

- Deposit insurance participating organizations are foreign credit organizations and banking branches established and operating under the Law on credit organizations are entitled to receive deposits of individuals.

(Clause 2, 3, Article 4 of the Law on deposit insurance 2012)

2. Regulations on deposit insurance fees in Vietnam

Deposit insurance fees in Vietnam are specified in Article 20 of the Law on deposit insurance 2012 as follows:

- The Prime Minister has regulated the fee framework of the deposit insurance at the request of the State Bank of Vietnam.

- Based on the fee framework of the deposit insurance, the State Bank of Vietnam shall regulate the specific fee rate ofthe deposit insurance for the deposit insurance participating organizations on the basis of assessment and classification of these organizations

- The deposit insurance fees are calculated on the basis of the average deposit balance of the insured deposit at the deposit insurance participating organizations.

- The deposit insurance fees are calculated and paid quarterly in the fiscal year. The deposit insurance participating organizations have to pay the deposit insurance fees to the deposit insurance organizations on the 20th date of the first month of the succeeding quarter at the latest.

- The deposit insurance fees are recorded into the operation expenses of the deposit insurance participating organizations.

3. Fee of inadequate and late payment in Vietnam

- If the deposit insurance participating organization violates the deadline to pay the deposit insurance fees as prescribed in Article 20 of this Law, in addition to fully paying the outstanding fee, it shall be fined for each day of late payment equal to 0.05% amount of the late payment.

- Where the deposit insurance organization discovers the inaccuracy in the calculation and payment of the fee of deposit insurance, the insurance organization shall give a notice and collect the arrear of fee or reimburse for the overpaid fee within 15 days from the date of discovery.

- After a period of 30 days from the date of payment of the deposit insurance fees that the deposit insurance participating organization fails to make payment or makes inedequate payment of deposit insurance fees and fines, the deposit insurance organization shall request in writing the State Bank of Vietnam to deduct the accounts of the deposit insurance participating organizations at the State Bank of Vietnam in order to pay the deposit insurance fees and fines.

Within 30 days from the date of receipt of the written request of the deposit insurance organization, the State Bank of Vietnam shall handle the case.

- In case the deposit insurance participating organization fails to make payment or makes inedequate payment of the deposit insurance fees, the State Bank of Vietnam shall deduct the accounts of the deposit insurance participating in order to pay the fees as prescribed in clause 3 of this Article for the second time, the deposit insurance organization shall send document to the State Bank of Vietnam to request a suspension or temporary suspension of deposit receving operation of the deposit insurance participating organization.

Diem My

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