On the morning of October 23, the National Assembly discussed the Draft Law on Deposit Insurance (amended) in groups. One of the key points of interest among delegates was the deposit insurance payout limit.
National Assembly Deputy Tran Hoang Ngan proposed increasing the deposit insurance payout limit. Photo: Van Duan
Commenting on the draft law, National Assembly Deputy Tran Hoang Ngan (Ho Chi Minh City delegation) noted that by July 2025, the total deposits from individuals had reached nearly 8,000 trillion VND, an enormous figure.
Combined with deposits from organizations, the total exceeds 15,000 trillion VND. “Compared to Vietnam’s GDP, which is around 12-13,000 trillion VND, the current financial depth is remarkably high,” the deputy remarked.
How can we ensure public confidence in the banking system?
According to Deputy Tran Hoang Ngan, while capital mobilization is crucial for credit supply, ensuring public confidence in the banking system is an urgent issue. Banking activities come with inherent risks, as evidenced by recent incidents at SCB Bank and Van Thinh Phat Group, which required coordinated efforts from the State Bank of Vietnam, political organizations in Ho Chi Minh City, and other banks to resolve.
As an economic expert, the deputy emphasized the importance of amending the Deposit Insurance Law to safeguard financial security, monetary stability, and social safety. While some provisions have been added to the draft, he suggested further consideration of additional aspects.
Chapter 3 of the draft law outlines the operations of deposit insurance, including several points that require careful evaluation. Notably, the banking system is inundated with numerous inactive or “junk” accounts, similar to “junk” SIM cards. Deputy Ngan urged commercial banks to actively clean up these “junk” accounts.
Additionally, he called for the credit rating of commercial banks to be assessed and publicly disclosed, enabling the public to identify well-performing banks. This transparency would enhance the overall quality of the commercial banking system and prevent situations requiring zero-dong bank interventions or special supervision.
Deputy Tran Hoang Ngan suggested prohibiting deposit insurance from investing in high-risk sectors. Photo: Van Duan
Regarding Article 17, which limits insured deposits to those in Vietnamese Dong, Deputy Ngan proposed that the State Bank and insurance organizations should also consider insuring foreign currency deposits held by individuals in banks, despite offering zero interest. This measure would encourage the mobilization of foreign currency holdings within the banking system.
Article 21 outlines the conditions triggering insurance payouts, such as the approval of a credit institution’s bankruptcy, the State Bank’s determination of a foreign bank branch’s insolvency, or a bank under special control with accumulated losses exceeding 100% of its charter capital. Deputy Ngan suggested involving auditing agencies in these assessments, given that commercial banks undergo annual audits.
“If a bank shows profits in audits but later becomes insolvent, auditing agencies must be held accountable to protect depositors,” he stated.
Concerning the payout limit in Article 22, Deputy Ngan supported the Governor of the State Bank of Vietnam’s authority to set periodic limits. However, he noted that the current maximum payout of 125 million VND fully covers deposits up to 100 million VND but only provides 8.38% coverage for larger deposits. He advocated for increasing the payout limit and introducing tiered insurance fees to enhance deposit security.
Deposit insurance should be prohibited from investing in high-risk sectors
Deputy Tran Hoang Ngan also advised against, or even prohibited, deposit insurance from investing in high-risk sectors. “Using funds meant to manage risk to invest in other risky ventures would jeopardize depositors’ safety,” he warned. He further cautioned against allowing deposit insurance to provide special loans to struggling banks, suggesting instead that the insurance organization be permitted to borrow from the State Bank in exceptional cases to support insurance payouts.
Three Cases of Deposit Insurance Payouts
According to the Governor of the State Bank of Vietnam, Nguyen Thi Hong, one of the significant new provisions in the draft is the regulation of the timing for insurance premium obligations to arise. This enables regulatory authorities to proactively manage risks and enhance protection for depositors.
Deputy Governor Pham Thanh Ha Meets with Banking System in Region 3
By September 30, 2025, the total outstanding loans across credit institutions in Region 3 reached 92,607 billion VND. The credit structure remains focused on production and business activities, particularly in priority sectors and growth drivers aligned with government policies.
Enhancing Early Warning Systems for Suspicious Transactions to Mitigate Fraud Risks in Financial Institutions
Early warning systems that provide proactive alerts and reminders to customers, helping them identify suspicious transactions and potential fraud, have proven highly effective. Their success underscores the need to prioritize, enhance, and expand these initiatives for broader impact and continuous development.
Proposing Fresh Content Ideas on Deposit Insurance
Some argue that the insurance payout limit of 125 million VND has become outdated in relation to today’s living standards, necessitating a more flexible adjustment.
Hanoi Pilots the Establishment of a Venture Capital Fund
The Hanoi Venture Capital Fund (HVCF) is a pioneering initiative established by the Hanoi People’s Committee, operating under a public-private partnership model through a business investment cooperation agreement. Unlike traditional entities, HVCF functions without legal personality, streamlining its operations to foster innovation and growth in the capital region.
