Surplus capital deposited in banks?
The Ministry of Finance’s Inspectorate has just announced the inspection results of 8 lottery companies nationwide, including the provinces/cities of Ho Chi Minh City, Hanoi, An Giang, Dong Nai, Tay Ninh, Ca Mau, Lam Dong, and Ba Ria-Vung Tau.
The inspection revealed that while these lottery companies hold significant amounts of savings in banks, they lack internal regulations regarding these deposits. The inspected companies had the following amounts deposited in banks: Ho Chi Minh City Lottery Company (1,226 billion VND), An Giang Lottery Company (1,024 billion VND), Dong Nai Lottery Company (over 987 billion VND), Tay Ninh Lottery Company (834 billion VND), Ca Mau Lottery Company (659 billion VND), and Ba Ria-Vung Tau Lottery Company (638.5 billion VND). These companies typically choose deposit terms of no term, 1 to less than 3 months, or 3 months to less than 12 months, with interest rates ranging from 3.7% to 7.25%. In 2023, financial revenue from bank deposits ranged from 35 to 74 billion VND for these companies.
Many lottery companies deposit billions of dong in banks to earn interest. In the picture, a traditional lottery ticket agent in Hanoi. Photo: QN
The Ministry of Finance’s Inspectorate pointed out that “most lottery companies have not established internal regulations related to term deposits in banks, nor have they issued procedures for selecting credit institutions for depositing money. This is inconsistent with the Ministry of Finance’s regulations on investment, management, and capital use in enterprises. While there are regulations on cash and deposit balances, they are not suitable, leading to large amounts of idle money being deposited in banks without a fixed term at many points in time.”
In the case of Dong Nai Lottery Company, monthly cash balances exceeded 1,000 billion VND, but they had not developed a plan or strategy for depositing money or established regulations for idle money deposits to ensure capital safety and optimize profits. Meanwhile, Ca Mau Lottery Company’s term deposits exceeding 3 months were consistently higher than its chartered capital.
The inspection also revealed that many lottery companies had bank deposits higher than their chartered capital. Notably, Ba Ria-Vung Tau Lottery Company’s bank deposits were equivalent to 104% of its chartered capital. Following the inspection, the Ministry of Finance requested that three lottery companies (Tay Ninh, Ca Mau, and Ba Ria-Vung Tau) adjust their chartered capital appropriately to avoid excessive bank deposits.
According to economic expert Ngo Tri Long, given the substantial amounts of money deposited by these lottery companies in banks, the Ministry of Finance, as the managing and supervising agency, should provide guidance to lottery companies in developing deposit regulations. The Ministry of Finance should issue general regulations and draw on the experiences of lottery companies that have successfully established deposit regulations to guide other companies nationwide.
Mr. Long stated that “bank deposits should aim to optimize the efficiency of state capital usage. However, each lottery company has different preferences for deposit terms and banks. Establishing regulations on deposits will prevent the risk of interest when the decision-maker has the power to choose the bank, term, and amount of savings.”
Many lottery companies have significant amounts of savings in banks but lack deposit regulations. The bank deposits of the lottery companies include: An Giang Lottery Company (1,024 billion VND), Dong Nai Lottery Company (over 987 billion VND), Tay Ninh Lottery Company (834 billion VND), Ca Mau Lottery Company (659 billion VND), and Ba Ria-Vung Tau Lottery Company (638.5 billion VND).
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