HÀ NỘI — Established in 1999 under the government’s Decree 89/1999/NĐ-CP, Deposit Insurance of Việt Nam (DIV) has emerged as a cornerstone of the country's financial stability. 

Over its 25-year history, DIV has consistently evolved to protect depositors' rights and contribute to the broader financial ecosystem's stability and resilience. This article examines its achievements, challenges and future directions, showcasing the organisation’s pivotal role in Việt Nam's banking and financial landscape.

The DIV officially began operations in November 1999 following Prime Ministerial Decision 218/1999/QĐ-TTg. Its mandate was to safeguard depositors' rights while fostering trust in the banking system. 

As of September, DIV has insured deposits totalling nearly VNĐ8.9 quadrillion (US$349.6 billion) across 1,278 insured institutions, including 96 commercial banks and foreign bank branches, 1,177 people’s credit funds, one cooperative bank and four microfinance institutions.

It performs continuous supervision of 100 per cent of insured institutions, conducts thorough oversight of troubled people's credit funds and periodically completes monitoring reports on insured institutions and in-depth monitoring reports on problematic people's credit funds.

DIV celebrated its 25th founding anniversary (1999-2024)

In its early years, DIV’s prompt insurance payouts helped stabilise financial systems and maintain depositor trust. It had reimbursed VNĐ26.78 billion to 1,793 depositors from 39 people's credit funds in 11 provinces and cities. 

In addition, DIV assigns and mobilises personnel to participate in Special Control Boards at people's credit funds under special control, as mandated by the State Bank of Việt Nam's (SBV) provincial and city branches. 

They consistently update operational trends and financial data, determine estimated payouts of problematic people's credit funds to advise promptly and propose solutions for emerging scenarios. 

It has also deployed staff to manage and oversee people's credit funds under special control in alignment with the SBV’s directives, while also contributing to evaluating the feasibility of recovery plans for these funds according to the provisions outlined under the 2024 Law on Credit Institutions.

DIV’s financial trajectory reflects its robust management and strategic vision. 

Starting with an initial capital of VNĐ1 trillion in 1999, its total assets surpassed VNĐ120 trillion by September. Of which, the Professional Reserve Fund accounted for VNĐ115 trillion, underscoring its readiness to meet insurance obligations while actively participating in credit institution restructuring.

DIV’s investment activities have also become a key pillar of its financial strength. Annual investment income has grown consistently, from VNĐ900 billion in 2011 to over VNĐ4 trillion in 2023. The growth bolsters DIV’s capital base, enhancing its capacity to manage future risks.

Strategic direction

DIV has positioned itself as an active member of the International Association of Deposit Insurers (IADI), hosting global conferences and exchanging best practices. This engagement has elevated Việt Nam’s profile in the global financial community and allowed DIV to adopt international standards tailored to the country’s unique context.

As it enters a new chapter, DIV is prioritising strategic directions to enhance its role in protecting depositors' rights and contributing to bank operation safety and effective restructuring.

It plans proactively advising the SBV on amending the Law on Deposit Insurance to ensure sustainable growth. 

DIV is also working toward several ambitious targets in the Development Strategy approved by the Prime Minister, including maintaining the proportion of fully insured depositors to 92 - 95 per cent by 2030, reducing practical insurance payout times to 30 working days in 2025 and 15 working days in 2030, and striving for 45 per cent by 2025 and 55 per cent by 2030 of depositors who grasp the core contents of the deposit insurance policy.

Recognising the transformative potential of technology, DIV is integrating advanced digital tools to enhance efficiency and security. It will continue refining and approving its Digital Transformation Plan up to 2025 and outlining the direction towards 2030 for unified implementation across the entire system.

DIV’s first 25 years have laid a strong foundation for future growth. Its achievements stem from the close guidance and timely support of the National Assembly, the Government, the SBV and related entities. This success is also a result of the unwavering efforts of successive generations of leaders, officials, and workers within the DIV system.

As DIV steps into its next phase, while building upon past accomplishments, acknowledging shortcomings, recognising opportunities and challenges, the unified leadership, officials and workforce of DIV are resolutely committed to collaborating harmoniously. 

Their goal is to evolve DIV into a modern deposit insurance organization aligned with international standards, as per the directives of the SBV and the roadmap outlined in the Deposit Insurance Development Strategy up to 2025, with directions towards 2030 endorsed by the Prime Minister. — VNS