Law on Deposit Insurance No. 06/2012/QH13

LAW

Deposit Insurance

_________

Pursuant to the Constitution of the Socialist Republic of Vietnam in 1992 as amended and supplemented by Resolution number 51/2001/QH10;

The National Assembly promulgates the Deposit Insurance Law.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Law stipulates the activities of deposit insurance, the rights and obligations of depositors, organizations participating in deposit insurance, deposit insurance organizations, and state management of deposit insurance.

Article 2. Applicability

This Law applies to deposit insurance beneficiaries, organizations participating in deposit insurance, deposit insurance organizations, agencies, organizations, and other individuals related to deposit insurance activities.

Article 3. Purpose of Deposit Insurance

Deposit insurance aims to protect the rights and legitimate interests of depositors, contribute to maintaining the stability of the credit organization system, and ensure safe and healthy development of banking operations.

Article 4. Definitions

In this Law, the following terms shall be understood as follows:

1. Deposit Insurance It is the guarantee for the repayment of deposits to depositors within the limit of deposit insurance payment when the participating credit organization is unable to pay out deposits to depositors or goes bankrupt.

2. Deposit Insurance Beneficiary A depositor is an individual with insured deposits at a participating credit organization.

3. Organization Participating in Deposit Insurance A credit organization is a foreign bank branch established and operating under the Law on Credit Organizations that accepts deposits from individuals.

4. Deposit Insurance Organization A deposit insurance organization is a state financial institution operating without profit-making objectives, implementing deposit insurance policies, contributing to maintaining the stability of the credit organization system, and ensuring safe and healthy development of banking operations.

5. Deposit Insurance Premium The premium is the amount that participating credit organizations must pay to the deposit insurance organization to insure deposits of depositors at participating credit organizations.

Article 5. Principles of Deposit Insurance

1. Deposit insurance is a mandatory form of insurance as prescribed by this Law.

2. Deposit insurance activities must be transparent, ensuring the rights and legitimate interests of deposit insurance beneficiaries, organizations participating in deposit insurance, and deposit insurance organizations.

Article 6. Participation in Deposit Insurance

1. Credit organizations and foreign bank branches accepting deposits from individuals must participate in deposit insurance, except as provided for in Clause 2 of this Article.

2. Policy banks are not required to participate in deposit insurance.

Article 7. State Policy on Deposit Insurance

1. The State has policies to protect the rights and legitimate interests of depositors.

Article 8. State Management Authority for Deposit Insurance

1. The Government uniformly manages state affairs concerning deposit insurance.

2. The State Bank of Vietnam is responsible before the Government for implementing state management of deposit insurance.

3. Ministries and ministerial-level agencies within their respective functions and powers shall be responsible for coordinating with the State Bank of Vietnam to implement state management of deposit insurance.

4. People's Committees at all levels within their respective functions and powers shall be responsible for coordinating with state management agencies to implement state management of deposit insurance in their localities.

Article 9. State Management Responsibilities for Deposit Insurance of the State Bank of Vietnam

1. Issuing or submitting to competent authorities for issuance normative legal documents on deposit insurance.

2. Submitting to the Prime Minister for approval the strategy for developing deposit insurance.

3. Inspecting, auditing, handling violations, and resolving complaints and denunciations regarding deposit insurance.

4. Submitting to the Prime Minister for decision on joining international organizations related to deposit insurance.

5. Signing international agreements or submitting to competent authorities for signing and accession to international treaties on deposit insurance.

Article 10. Prohibited Acts

1. Organizations participating in deposit insurance failing to pay deposit insurance premiums.

2. The deposit insurance organization does not pay or pays insufficiently the deposit insurance.

3. Fraud, forgery of documents, files, and papers related to deposit insurance.

4. Obstructing, causing difficulties, and damaging the rights and legitimate interests of the deposit insurance organization, participating credit organizations, depositors, and entities related to deposit insurance.

5. Misusing positions and powers to violate laws on deposit insurance.

Chapter II
RIGHTS AND OBLIGATIONS OF DEPOSITORS
PARTICIPATING ORGANIZATIONS IN DEPOSIT INSURANCE,
DEPOSIT INSURANCE ORGANIZATION

Article 11. Rights and obligations of deposit insurance beneficiaries

1. To be insured for their deposits at participating organizations according to this Law.

2. To receive full and timely payment of deposit insurance according to this Law.

3. To request participating organizations and deposit insurance organizations to provide complete and accurate information about deposit insurance.

4. To lodge complaints, file reports, and initiate lawsuits against agencies, organizations, or individuals related to deposit insurance in accordance with the provisions of the law.

5. To provide complete and truthful information about deposits upon request from participating organizations and deposit insurance organizations when processing insurance payment procedures.

Article 12. Rights and obligations of organizations participating in deposit insurance

1. To submit application files for issuance of Deposit Insurance Participation Certificates.

2. To be issued Deposit Insurance Participation Certificates.

3. To pay deposit insurance premiums fully and on time.

4. To request the deposit insurance organization to pay insurance money to deposit insurance beneficiaries at the participating deposit insurance organization when there is an obligation to pay insurance money.

5. To lodge complaints, file reports, and initiate lawsuits against agencies, organizations, or individuals related to deposit insurance in accordance with the provisions of the law.

6. To provide information about insured deposits to the deposit insurance organization periodically or upon request of the deposit insurance organization.

Article 13. Rights and obligations of deposit insurance organizations

1. To develop a strategy for deposit insurance development to be submitted to the State Bank of Vietnam.

2. To propose to competent state management agencies to issue new, amend, supplement, replace, abolish, revoke, suspend the implementation of regulatory legal documents related to deposit insurance activities.

3. To be subject to inspection, audit, and supervision by the State Bank of Vietnam and other competent state agencies in accordance with the provisions of the law.

4. To issue and recall Deposit Insurance Participation Certificates.

5. To request participating deposit insurance organizations to provide information about insured deposits.

6. To calculate and collect deposit insurance premiums from participating deposit insurance organizations in accordance with this Law.

7. To manage, utilize, and preserve the deposit insurance fund.

8. To pay insurance money to deposit insurance beneficiaries in accordance with this Law.

9. To monitor and inspect compliance with legal regulations on deposit insurance; to recommend the State Bank of Vietnam to handle violations of legal regulations on deposit insurance.

10. To compile, analyze, and process information about participating deposit insurance organizations to detect and recommend the State Bank of Vietnam to promptly handle violations of regulations on banking operation safety and risks causing instability in the banking system.

11. To ensure confidentiality of deposit data and documents related to deposit insurance of participating deposit insurance organizations in accordance with the provisions of the law.

12. To accept support on a reimbursable basis from the state budget according to the decision of

13. To participate in the special control process of participating deposit insurance organizations in accordance with the regulations of the State Bank of Vietnam; to participate in managing and liquidating assets of participating deposit insurance organizations in accordance with the regulations of the Government.

14. To organize propaganda on policies and laws on deposit insurance; to organize training and upgrading of skills in deposit insurance, research and apply science, technology, and management methods suitable for the development requirements of deposit insurance organizations.

Chapter III
DEPOSIT INSURANCE ACTIVITIES

Section 1
DEPOSIT INSURANCE PARTICIPATION CERTIFICATE

Article 14. Issuance of Deposit Insurance Participation Certificates

1. At the latest 15 days before the opening day of operations, participating deposit insurance organizations must submit application files for issuance of Deposit Insurance Participation Certificates to the deposit insurance organization.

2. Within five working days from the date of receipt of the application file for issuance of Deposit Insurance Participation Certificates from participating deposit insurance organizations, the deposit insurance organization shall have the responsibility to issue Deposit Insurance Participation Certificates.

3. The application file for issuance of Deposit Insurance Participation Certificates includes:

a) Application form for participation in deposit insurance;

b) Copy of the license for establishment and operation of credit institutions or the license for establishment of foreign bank branches;

c) Copy of the business registration certificate.

Article 15. Public Display of Deposit Insurance Participation Certificate

Organizations participating in deposit insurance must publicly display a copy of the Deposit Insurance Participation Certificate at all transaction points that accept deposits.

Article 16. Revocation of Deposit Insurance Participation Certificate

1. An organization participating in deposit insurance shall have its Deposit Insurance Participation Certificate temporarily withdrawn when the State Bank of Vietnam issues a document temporarily suspending its deposit acceptance activities in accordance with the law. During the period of temporary withdrawal of the Deposit Insurance Participation Certificate, the organization participating in deposit insurance must pay deposit insurance premiums for deposits that have not yet been paid.

2. An organization participating in deposit insurance shall have its Deposit Insurance Participation Certificate revoked when the State Bank of Vietnam issues a document revoking the establishment and operation license of the credit institution or the foreign bank branch establishment license in accordance with the law.

3. Within five working days from the date of revoking the Deposit Insurance Participation Certificate, the deposit insurance organization must publicly announce the revocation of the Deposit Insurance Participation Certificate on three consecutive issues of a central newspaper, a local newspaper where the main office is located, branches of the organization participating in deposit insurance, and on a Vietnamese online newspaper.

Article 17. Reissue of Deposit Insurance Participation Certificate

1. An organization participating in deposit insurance shall be reissued a Deposit Insurance Participation Certificate when the State Bank of Vietnam permits it to resume deposit acceptance activities.

2. A Deposit Insurance Participation Certificate that is lost, torn, or damaged shall be reissued within five working days from the date of receiving the request for reissuance of the Deposit Insurance Participation Certificate from the organization participating in deposit insurance.

Section 2. DEPOSIT INSURED

Article 18. Insured Deposits

Insured deposits are deposits in Vietnamese dong made by individuals at organizations participating in deposit insurance in the form of term deposits, non-term deposits, savings deposits, deposit certificates, bills, promissory notes, and other deposit forms as prescribed by the Law on Credit Institutions, except for the types of deposits specified in Article 19 of this Law.

Article 19. Non-insured Deposits

1. Deposits at credit institutions made by individuals who own more than 5% of the charter capital of the same credit institution.

2. Deposits at credit institutions made by individuals who are members of the Board of Members, Board of Management, Supervisory Board, General Director (Director), Deputy General Director (Deputy Director) of the same credit institution; deposits at foreign bank branches made by individuals who are General Director (Director), Deputy General Director (Deputy Director) of the same foreign bank branch.

3. Money used to purchase anonymous securities issued by organizations participating in deposit insurance.

Section 3. DEPOSIT INSURANCE FEES

Article 20. Deposit Insurance Premiums

1. The Prime Minister shall prescribe the framework for deposit insurance premiums based on the proposal of the State Bank of Vietnam.

2. Based on the framework for deposit insurance premiums, the State Bank of Vietnam shall specify the specific amount of deposit insurance premiums for organizations participating in deposit insurance based on the results of evaluating and classifying these organizations.

3. Deposit insurance premiums are calculated based on the average balance of insured deposits at organizations participating in deposit insurance.

4. Deposit insurance premiums are calculated and paid quarterly during the fiscal year. Organizations participating in deposit insurance must pay deposit insurance premiums to the deposit insurance organization no later than the twentieth day of the first month of the next quarter.

5. Deposit insurance premiums are recorded as operating expenses of organizations participating in deposit insurance.

Article 21. Late Payment Fees

1. An organization participating in deposit insurance that violates the deadline for paying deposit insurance premiums as stipulated in Article 20 of this Law shall, in addition to paying the outstanding premium, be subject to a daily late payment penalty equal to 0.05% of the amount of the late payment.

2. In cases where the deposit insurance organization discovers inaccuracies in the calculation and payment of deposit insurance premiums, the deposit insurance organization shall have the responsibility to notify and recover any outstanding premiums or refund any overpaid premiums within fifteen days from the date of discovery.

3. After thirty days from the due date for paying deposit insurance premiums, if an organization participating in deposit insurance fails to pay or does not fully pay the deposit insurance premium and the late payment penalty, the deposit insurance organization shall issue a written request to the State Bank of Vietnam to deduct from the account of the participating organization at the State Bank of Vietnam to pay the deposit insurance premium and the late payment penalty. Within thirty days from the date of receipt of the written request from the deposit insurance organization, the State Bank of Vietnam shall be responsible for processing.

4. In cases where an organization participating in deposit insurance fails to pay or does not fully pay the deposit insurance premium, and the State Bank of Vietnam must deduct from the account of the participating organization to pay the premium according to the provisions of Clause 3 of this Article for the second time, the deposit insurance organization shall issue a written request to the State Bank of Vietnam to suspend or temporarily suspend the acceptance of deposits by the participating organization.

Section 4. PAYMENT OF INSURANCE MONEY

Article 22. Time of Arising Obligation to Pay Insurance Money

The obligation to pay insurance money arises from the date on which the State Bank of Vietnam issues a document terminating special supervision or a document terminating or not applying measures to restore solvency, and the credit institution participating in deposit insurance still falls into bankruptcy, or the State Bank of Vietnam issues a document determining that a foreign bank branch participating in deposit insurance has lost the ability to pay deposits to depositors.

Article 23. Time Limit for Payment of Insurance Money

Within sixty days from the date of arising the obligation to pay insurance money, the deposit insurance organization shall be responsible for paying insurance money to the insured depositor.

Article 24. Insurance Payment Limit

1. The insurance payment limit is the maximum amount that the deposit insurance organization pays for all insured deposits of a person at a participating organization when the obligation to pay insurance money arises.

2. The Prime Minister shall prescribe the insurance payment limit based on the proposal of the State Bank of Vietnam during each period.

Article 25. Amount of Insurance Money Paid

1. The amount of insurance money paid for all insured deposits of a person at a participating organization includes principal and interest, with a maximum equal to the insurance payment limit prescribed in Article 24 of this Law.

2. The amount of insurance money paid in the case of joint ownership of insured deposits is regulated as follows:

a) The amount of insurance money paid for all insured deposits jointly owned by multiple persons at a participating organization includes principal and interest, with a maximum equal to the insurance payment limit for one person prescribed in Article 24 of this Law. The amount of insurance money paid will be divided according to the agreement among co-owners; in cases where there is no agreement or no agreement can be reached among co-owners, it shall be resolved in accordance with the provisions of the law;

b) In cases where one of the co-owners has other insured deposits at the same participating organization, the total amount of insurance money paid to one co-owner shall not exceed the insurance payment limit.

3. In cases where the insured depositor has a debt at the participating organization, the amount of insured deposit is the remaining amount after deducting such debt.

Article 26. Insurance Payment Procedures

1. Within ten working days from the date when the obligation to pay insurance money arises, the participating deposit insurance organization must submit the application for insurance payment to the deposit insurance organization. The application for insurance payment includes the request for insurance payment, a list of insured depositors, the amount deposited by each insured depositor, and the amount of insurance requested to be paid by the deposit insurance organization.

The application for insurance payment includes the request for insurance payment, a list of insured depositors, the amount deposited by each insured depositor, and the amount of insurance requested to be paid by the deposit insurance organization.

2. Within five working days from the date of receiving all required documents as stipulated in Clause 1 of this Article, the deposit insurance organization shall examine the documents and records to determine the amount to be paid out.

3. Within ten working days from the date of completing the examination as stipulated in Clause 2 of this Article, the deposit insurance organization must develop a plan for paying insurance money to the insured depositors; publicly announce the location, time, and method of payment on three consecutive issues of a central newspaper, a local newspaper where the main office and branches of the participating deposit insurance organization are located, and on a Vietnamese online news site; post the list of insured depositors who will receive payment at the announced location.

4. When receiving insurance money, the insured depositor must present documents proving their lawful ownership over the insured deposits at the participating deposit insurance organization.

5. The deposit insurance organization directly pays insurance money to the insured depositor or authorizes another participating deposit insurance organization to do so.

6. After a period of ten years from the date the deposit insurance organization first announces the payment of insurance money, any unclaimed insurance money will be established as state property and added to the operational capital of the deposit insurance organization; the owner of the insured deposit will have no right to request the deposit insurance organization to pay that insurance money.

Article 27. Handling Excess Deposit Amounts Beyond Insurance Payment Limits

The excess deposit amounts of insured depositors, including principal and interest exceeding the insurance payment limit, will be resolved during the asset handling process of the participating deposit insurance organization according to the law.

Article 28. Recovery of Insurance Money Due from Participating Deposit Insurance Organizations

1. From the date of making the insurance payment announcement as stipulated in Clause 3 of Article 26 of this Law, the deposit insurance organization becomes a creditor of the participating deposit insurance organization for the insurance money due to the insured depositors.

2. The deposit insurance organization is entitled to share in the value of assets in the same order as depositors and recover the insurance money due during the asset handling process of the participating deposit insurance organization according to the law.

Chapter IV
DEPOSIT INSURANCE ORGANIZATION

Article 29. Deposit Insurance Organization

1. The deposit insurance organization is a financial institution established by

2. The deposit insurance organization is a legal entity operating without profit-making objectives, ensuring capital safety and self-covering costs.

Article 30. Sources of Operating Capital

1. The charter capital of deposit insurance organizations shall be provided from the state budget.

2. Revenue from deposit insurance premiums.

3. Revenue from investment activities using temporarily idle funds of deposit insurance organizations.

4. Other sources as prescribed by law.

Article 31. Investment Activities

Deposit insurance organizations may use temporarily idle funds to purchase government bonds, State Bank of Vietnam bills, and deposit money at the State Bank of Vietnam.

Article 32. Financial System, Accounting Records, and Auditing

1. The financial system of deposit insurance organizations shall be regulated by the Ministry of Finance in coordination with the State Bank of Vietnam.

The fiscal year for deposit insurance organizations begins on January 1 and ends on December 31 of each calendar year.

2. Deposit insurance organizations shall implement accounting records in accordance with the provisions of the law.

3. Annual financial reports of deposit insurance organizations must be audited and confirmed by the National Audit Office.

Chapter V
INFORMATION ACTIVITIES AND REPORTING

Article 33. Reporting Obligations and Information Disclosure of Deposit Insurance Organizations

1. Deposit insurance organizations shall have the responsibility to report to the State Bank of Vietnam the following information:

a) Information on compliance with legal regulations on deposit insurance of participating organizations periodically every six months or upon request of the State Bank of Vietnam;

b) Information on payment of insurance proceeds to insured depositors periodically every six months or upon request of the State Bank of Vietnam;

c) Results of implementing tasks stipulated in Clause 10, Article 13 of this Law, periodically every quarter or exceptionally upon request of the State Bank of Vietnam;

d) Annual audited financial reports and annual activity reports;

e) Other information about deposit insurance activities as required by the State Bank of Vietnam.

2. Deposit insurance organizations have the responsibility to disclose information about the recovery of Deposit Insurance Participation Certificates and payment plans for insured depositors as prescribed in Clause 3, Article 16 and Clause 3, Article 26 of this Law.

Article 34. Provision of Information by the State Bank of Vietnam

1. Deposit insurance organizations are permitted to access data and information of the State Bank of Vietnam regarding participating organizations to perform functions and tasks as prescribed by this Law.

2. The State Bank of Vietnam has the responsibility to allow deposit insurance organizations to access data and information about participating organizations according to the regulations of the Government.

Chapter VI
INSPECTION AND COMPLAINTS REGARDING DEPOSIT INSURANCE

Article 35. Inspection of Deposit Insurance

1. The State Bank of Vietnam shall perform the function of supervising deposit insurance.

2. The objects of supervision of deposit insurance are deposit insurance organizations and organizations participating in deposit insurance.

3. The rights and obligations of inspected entities regarding deposit insurance shall be implemented in accordance with the Law on the State Bank of Vietnam and laws on inspection.

4. The procedures and formalities for inspecting deposit insurance for participating organizations shall be carried out in accordance with the Law on the State Bank of Vietnam and laws on inspection.

5. The procedures and formalities for inspecting deposit insurance for deposit insurance organizations shall be carried out in accordance with laws on inspection.

Article 36. Complaints Regarding Deposit Insurance

1. The resolution of complaints against administrative decisions and actions regarding deposit insurance shall be implemented in accordance with the laws on complaints.

2. The resolution of complaints against decisions and actions of deposit insurance organizations shall be carried out as follows:

a) The authority responsible for resolving initial complaints regarding deposit insurance is the deposit insurance organization. The complaint resolution period of the deposit insurance organization is 15 days, starting from the date of receipt of the complaint letter;

b) In cases where the complainant disagrees with the initial decision on complaint resolution or if the complaint is not resolved within the prescribed time limit, the complainant has the right to file a complaint with the Governor of the State Bank of Vietnam;

c) The Governor of the State Bank of Vietnam is responsible for resolving complaints within 30 days from the date of receipt of the complaint letter. If the complainant disagrees with the decision on complaint resolution by the Governor of the State Bank of Vietnam, the complainant has the right to initiate legal proceedings at the Court in accordance with the law.

Chapter VII
IMPLEMENTING PROVISIONS

Article 37. Transitional Provisions

Deposit insurance certificates issued before this Law comes into effect continue to be valid.

Article 38. Effective Date

This Law takes effect from January 1, 2013.

Article 39. Detailed regulations and guidance on implementation

The Government shall provide detailed regulations and guidance for the implementation of the provisions assigned in this Law.

This Law was adopted by the National Assembly of the Socialist Republic of Vietnam, XIIIth term, third session, on June 18, 2012./.