Law on Deposit Insurance 2012, No. 06/2012/QH13

THE PRESIDENT

Order No. 04/2012/L-CTN of July 2, 2012, on the promulgation of law

THE PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM

Pursuant to Articles 103 and 106 of the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10 of December 25, 2001, of the XthNational Assembly, the 10thsession;

Pursuant to Article 91 of the Law on Organization of the National Assembly;

Pursuant to Article 57 of the Law on Promulgation of Legal Documents,

PROMULGATES

The Law on Deposit Insurance,

which was passed on June 18, 2012, by the XIIIthNational Assembly of the Socialist Republic of Vietnam at its 3rdsession.-

President of the Socialist Republic of Vietnam
TRUONG TAN SANG

Law on Deposit Insurance

(No. 06/2012/QH13)

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;

The National Assembly promulgates the Law on Deposit Insurance.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Law provides for deposit insurance activities, rights and obligations of insured depositors, organizations participating in deposit insurance, deposit insurers, and state management of deposit insurance.

Article 2.Subjects of application

This Law applies to insured depositors, organizations participating in deposit insurance, deposit insurers, and other agencies, organizations and individuals involved in deposit insurance activities.

Article 3.Purposes of deposit insurance

Deposit insurance aims to protect the lawful rights and interests of depositors, contributing to maintaining the stability of the credit institution system and ensuring safe and sound development of banking operations.

Article 4.Interpretation of terms

In this Law, the terms below are construed as follows:

1.Deposit insurancemeans the guarantee for repayment of deposits to insured depositors within the insurance payment limit when an organization participating in deposit insurance falls into a state of insolvency or bankruptcy.

2.Insured depositormeans an individual having his/her deposits insured at an organization participating in deposit insurance.

3.Organization participating in deposit insurancemeans a credit institution or foreign bank branch established and operating under the Law on Credit Institutions and licensed to receive deposits from individuals.

4.Deposit insurermeans a state financial institution operating not for profit and implementing the deposit insurance policy, contributing to maintaining the stability of the credit institution system and ensuring safe and sound development of banking operations.

5.Deposit insurance premiummeans an amount to be paid by an organization participating in deposit insurance to a deposit insurer to insure deposits of insured depositors at such organization.

Article 5.Deposit insurance principles

1. Deposit insurance is compulsory under this Law.

2. Deposit insurance activities must be public and transparent and ensure the lawful rights and interests of insured depositors, organizations participating in deposit insurance and deposit insurers.

Article 6.Participation in deposit insurance

1. Credit institutions and foreign bank branches licensed to receive deposits from individuals are obliged to participate in deposit insurance, except the case specified in Clause 2 of this Article.

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

Article 7.State policies on deposit insurance

1. The State shall adopt policies to protect the lawful rights and interests of depositors.

2. The State shall adopt management and use policies to preserve and increase capital sources of deposit insurers. Deposit insurers’ revenues are exempt from all taxes.

Article 8.State management agencies in charge of deposit insurance

1. The Government shall perform the unified state management of deposit insurance.

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

3. Ministries and ministerial-level agencies shall, within the ambit of their tasks and powers, coordinate with the State Bank of Vietnam in performing the state management of deposit insurance.

4. People’s Committees at all levels shall, within the ambit of their tasks and powers, coordinate with state management agencies in, performing the state management of deposit insurance in localities.

Article 9.The State Bank of Vietnam’s responsibility to perform state management of deposit insurance

1. To issue or submit to competent agencies for promulgation legal documents on deposit insurance.

2. To submit to the Prime Minister for approval a strategy on deposit insurance development.

3. To examine, inspect and handle violations and settle complaints and denunciations related to deposit insurance.

4. To submit to the Prime Minister to decide on deposit insurers’ participation in an international organization on deposit insurance.

5. To conclude international agreements or submit to competent agencies the conclusion of or accession to treaties on deposit insurance.

Article 10.Prohibited acts

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

2. Deposit insurers failing to pay or fully pay insurance money.

3. Committing frauds in or forging dossiers, documents and papers on deposit insurance.

4. Obstructing, troubling, or damaging the lawful rights and interests of, deposit insurers, organizations participating in deposit insurance, insured depositors and agencies and organizations involved in deposit insurance.

5. Abusing positions and powers to violate laws and regulations on deposit insurance.

Chapter II

RIGHTS AND OBLIGATIONS OF INSURED DEPOSITORS, ORGANIZATIONS PARTICIPATING IN DEPOSIT INSURANCE AND DEPOSIT INSURERS

Article 11.Rights and obligations of insured depositors

1. To have their deposits at organizations participating in deposit insurance insured in accordance with this Law.

2. To fully and timely receive insurance money in accordance with this Law.

3. To request organizations participating in deposit insurance and deposit insurers to provide adequate and accurate information and regulations on deposit insurance.

4. To complain, denounce, and initiate lawsuits against agencies, organizations and individuals involved in deposit insurance in accordance with law.

5. To provide adequate and truthful information on deposits at the request of organizations participating in deposit insurance and deposit insurers when carrying out insurance payment procedures.

Article 12.Rights and obligations oforganizations participating in deposit insurance

1. To submit dossiers of application for deposit insurance participation certificates.

2. To be granted deposit insurance participation certificates.

3. To fully and timely pay deposit insurance premiums.

4. To request deposit insurers to pay insurance money to insured depositors at organizations participating in deposit insurance when the obligation to pay insurance money arises.

5. To complain, denounce, and initiate lawsuits against agencies, organizations and individuals involved in deposit insurance in accordance with law.

6. To provide information on insured deposits to deposit insurers regularly or at the latter’s request.

Article 13.Rights and obligations ofdeposit insurers

1. To formulate a deposit insurance development strategy for the State Bank of Vietnam to submit to the Prime Minister for approval, and organize the implementation of this strategy.

2. To propose competent state management agencies to issue or amend, supplement, replace, cancel, annul, or suspend the implementation of, legal documents on deposit insurance.

3. To submit to the examination, inspection and supervision by the State Bank of Vietnam and competent state agencies in accordance with law.

4. To grant and revoke deposit insurance participation certificates.

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

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

7. To manage, use and preserve deposit insurance capital sources.

8. To pay insurance money to insured depositors in accordance with this Law.

9. To monitor and examine the observance of regulations on deposit insurance; to propose the State Bank of Vietnam to handle violations of laws and regulations on deposit insurance.

10. To summarize, analyze and process information on organizations participating in deposit insurance with a view to detecting, and proposing the State Bank of Vietnam to timely handle, violations of laws and regulations on safety of banking operations and risks to safety within the banking system.

11. To keep confidential deposit data and documents related to deposit insurance of organizations participating in deposit insurance in accordance with law.

12. To receive supports on the principle of repayment from the state budget under the Prime Minister’s decisions or taking loans from credit institutions or other institutions with government guarantee in case their capital sources are temporarily insufficient for paying insurance money; to receive financial assistance from domestic and foreign organizations and individuals for improving their operation capacity.

13. To participate in the special control of organizations participating in deposit insurance according to regulations of the State Bank of Vietnam; to participate in managing and liquidating assets of these organizations under the Government’s regulations.

14. To disseminate policies and laws on deposit insurance; to organize professional training and retraining in deposit insurance; to study application of sciences, technologies and management models to meet their development requirements.

Chapter III

DEPOSIT INSURANCE ACTIVITIES

Section 1

DEPOSIT INSURANCE PARTICIPATION CERTIFICATES

Article 14.Grant of deposit insurance participation certificates

1. At least 15 days before operation inauguration, an organization participating in deposit insurance shall submit a dossier of application for a deposit insurance participation certificate to a deposit insurer.

2. Within 5 working days after receiving the dossier of application for a deposit insurance participation certificate from an organization wishing to participate in deposit insurance, the deposit insurer shall grant a deposit insurance participation certificate.

3. A dossier of application for a deposit insurance participation certificate comprises:

a/ A registration application for participation in deposit insurance;

b/ A copy of the establishment and operation license, for credit institutions, or of the establishment license, for foreign bank branches;

c/ A copy of the business registration certificate.

Article 15.Posting up ofdeposit insurance participation certificates

Organizations participating in deposit insurance shall publicly post up copies of their deposit insurance participation certificates at all transaction places at which deposits are received.

Article 16.Revocation ofdeposit insurance participation certificates

1. An organization participating in deposit insurance will have its deposit insurance participation certificate temporarily revoked when the State Bank of Vietnam issues a document suspending its deposit receipt activities in accordance with law. While its deposit insurance participation certificate is temporarily revoked, the organization participating in deposit insurance shall pay deposit insurance premiums for deposits for which premiums have not yet been paid.

2. An organization participating in deposit insurance will have its deposit insurance participation certificate revoked when the State Bank of Vietnam issues a document revoking its establishment and operation license, for credit institutions, or its  establishment license, for foreign bank branches, in accordance with law.

3. Within 5 working days after revoking a deposit insurance participation certificate, the deposit insurer shall publicly notify such revocation in three consecutive issues of a central newspaper, a newspaper of the locality in which it is headquartered and a Vietnamese online newspaper, and at branches of the concerned organization participating in deposit insurance.

Article 17.Re-grant ofdeposit insurance participation certificates

1. An organization participating in deposit insurance will have its deposit insurance participation certificate re-granted when the State Bank of Vietnam permits it to restore deposit receipt activities.

2. A deposit insurance participation certificate which is lost, torn or damaged may be re-granted within 5 working days after the receipt of a certificate re-grant application from the concerned organization participating in deposit insurance.

Section 2

INSURED DEPOSITS

Article 18.Insured deposits

Insured deposits are Vietnam-dong deposits of individuals at an organization participating in deposit insurance in the form of time deposit, demand deposit, savings deposit, deposit certificate, promissory note, treasury bill and other forms of deposit under the Law on Credit Institutions, except the deposits defined in Article 19 of this Law.

Article 19.Non-insured deposits

1. Deposits at a credit institution by an individual owning over 5% of the charter capital of that credit institution.

2. Deposits at a credit institution by an individual being a member of the Members’ Council, member of the Board of Directors, member of the Control Board, the director general (director) or deputy director general (deputy director) of that credit institution; deposits at a foreign bank branch by an individual being the director general (director) or a deputy director general (deputy director) of that foreign bank branch.

3. Money paid for bearer valuable papers issued by organizations participating in deposit insurance.

Section 3

DEPOSIT INSURANCE PREMIUMS

Article 20.Deposit insurance premiums

1. The Prime Minister shall stipulate the deposit insurance premium frame at the proposal of the State Bank of Vietnam.

2. Based on the deposit insurance premium frame, the State Bank of Vietnam shall set specific deposit insurance premium rates applicable to organizations participating in deposit insurance on the basis of results of evaluation and classification of these organizations.

3. Deposit insurance premiums shall be calculated based on the average outstanding deposits insured at organizations participating in deposit insurance.

4. Deposit insurance premiums shall be quarterly calculated and paid in a fiscal year. Organizations participating in deposit insurance shall pay deposit insurance premiums to deposit insurers no later than the 20thof the first month of the subsequent quarter.

5. Deposit insurance premiums shall be accounted as operating expenses of organizations participating in deposit insurance.

Article 21.Feefor deficient or late payment

1. Organizations participating in deposit insurance that violate regulations on the time limit for deposit insurance premium payment specified in Article 20 of this Law shall pay not only the deficient premium but also a fine equivalent to 0.05% of the late-paid amount per day.

2. If detecting any inaccuracy in deposit insurance premium calculation and payment, a deposit insurer shall, within 15 days, notify such inaccuracy and retrospectively collect the deficient premium or refund the surplus premium.

3. Thirty days after the date set for deposit insurance premium payment, if an organization participating in deposit insurance fails to pay or fully pay deposit insurance premiums and fine, the deposit insurer may request in writing the State Bank of Vietnam to deduct money from the account of such organization opened at the State Bank of Vietnam for paying deposit insurance premiums and fine. Within 30 days after receiving the written request from the deposit insurer, the State Bank of Vietnam shall make the deduction.

4. When an organization participating in deposit insurance fails to pay or fully pay deposit insurance premiums, therefore the State Bank of Vietnam has for the second time to deduct money from the account of such organization for premium payment under Clause 3 of this Article, the deposit insurer may request in writing the State Bank of Vietnam to terminate or suspend deposit receipt activities of such organization.

Section 4

PAYMENT OF INSURANCE MONEY

Article 22.Time when the obligation to pay insurance money arises

The obligation to pay insurance moneyarises from the time when the State Bank of Vietnam issues a document terminating the special control or a document terminating the application or a document on non-application of measures to restore solvency but the credit institution being an organization participating in deposit insurance still falls into bankruptcy, or the time when the State Bank of Vietnam issues a document identifying that the foreign bank branch being an organization participating in deposit insurance loses its solvency.

Article 23.Time limit for insurance money payment

Within 60 days after the time when the obligation to pay insurance money arises, deposit insurers shall pay insurance money to insured depositors.

Article 24.Insurance money limit

1. Insurance money limitmeans the maximum sum to be paid by a deposit insurer for all insured deposits of a person at an organization participating in deposit insurance when the obligation to pay insurance money arises.

2. The Prime Minister shall stipulate the insurance money limitat the proposal of the State Bank of Vietnam in each period.

Article 25.Insurance amount to be paid

1. The insurance amount to be paid for all insured deposits of a person at an organization participating in deposit insurance, inclusive of both principal and interest, must not exceed the insurance money limitspecifiedin Article 24 of this Law.

2. The insurance amount to be paid in case many persons co-own insured deposits is specified as follows:

a/ The insurance amount to be paid for all insured deposits of co-owners at an organization participating in deposit insurance, inclusive of both principal and interest, must not exceed the insurance money limit for a personas specifiedin Article 24 of this Law. The insurance amount to be paid shall be divided as agreed by co-owners; if co-owners have no agreement or fail to reach agreement, such insurance amount shall be handled in accordance with law;

b/ In case one of co-owners has another insured deposit at the same organization participating in deposit insurance, the total insurance amount to be paid for such co-owner must not exceed the insurance money limit.

3. In case an insured depositor has a debt at the organization participating in deposit insurance, the insured deposit must be subtracted with such debt.

Article 26.Procedures for insurance money payment

1. Within 10 working days after the obligation to pay insurance money arises, the organization participating in deposit insurance shall send a dossier of request for insurance money payment to the deposit insurer.

A dossier of request for insurance money payment comprises a written request for insurance money payment, a list of insured depositors, deposit of each insured depositor, and insurance amount requested to be paid by the deposit insurer.

2. Within 5 working days after receiving a complete dossier specified in Clause 1 of this Article, the deposit insurer shall examine papers and books for determining the to-be-paid amount.

3. Within 10 working days after finishing the examination under Clause 2 of this Article, the deposit insurer shall have a plan for paying insurance money to insured depositors; publicly notify the place, time and mode of insurance money payment in three consecutive issues of a central newspaper, a newspaper of the locality in which it is headquartered and a Vietnamese online newspaper, and at branches of the concerned organization participating in deposit insurance; and post up a list of persons eligible for insurance money at the places of notification.

4. To receive insurance money, insured depositors shall produce papers evidencing their lawful ownership of insured deposits at organizations participating in deposit insurance.

5. Deposit insurers shall directly pay insurance money to insured depositors or authorize other organizations participating in deposit insurance to do so.

6. Ten years after the deposit insurer issues the first-time notice on insurance money payment, insurance amounts without recipients will belong to the State and be added to operating capital sources of the deposit insurer; owners of insured amounts may not request the deposit insurer to pay such amounts.

Article 27.Handling of deposits in excess of the insurance money limit

Insured depositors’ deposits, both principal and interest, which exceed the insurance money limitshall be handled in the course of handling assets of organizations participating in deposit insurance in accordance with law.

Article 28.Collection of payable insurance amounts fromorganizations participating in deposit insurance

1. The deposit insurer becomes a creditor of the organization participating in deposit insurance with regard to the insurance amount payable to the insured depositor from the date of insurance money payment as notified under Clause 3, Article 26 of this Law.

2. The deposit insurer is eligible for a divided value of assets like depositors and may collect the payable insurance amount in the course of handling assets of the organization participating in deposit insurance in accordance with law.

Chapter IV

DEPOSIT INSURERS

Article 29.Deposit insurers

1. Deposit insurers are financial institutions established by the Prime Minister and having their functions and tasks defined by the Prime Minister.

2. Deposit insurers are legal person entities operating not for profit, ensuring their capital safety and self-financing.

Article 30.Operating capital sources

1. A deposit insurer’s charter capital allocated from the state budget.

2. Revenue from deposit insurance premiums.

3. Revenue from investment of temporarily idle capital of a deposit insurer.

4. Other revenues as provided by law.

Article 31.Investment activities

Deposit insurers may use temporarily idle capital to buy government bonds, treasury bills of the State Bank of Vietnam and deposit their money at the State Bank of Vietnam.

Article 32.Financial, cost-accounting and audit regulations

1. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the State Bank of Vietnam in, stipulating financial regulations applicable to deposit insurers.

The fiscal year of deposit insurers starts on January 1 and ends on December 31 of the calendar year.

2. Deposit insurers shall conduct cost-accounting in accordance with law.

3. Deposit insurers’ annual financial statements must be audited and certified by the State Audit of Vietnam.

Chapter V

INFORMATION AND REPORTING ACTIVITIES

Article 33.Deposit insurers’ responsibility to report and publicize information

1. Deposit insurers shall report to the State Bank of Vietnam the following:

a/ Information on the observance of regulations on deposit insurance by organizations participating in deposit insurance biannually or extraordinarily at the request of the State Bank of Vietnam;

b/ Information on payment of insurance money to insured depositors biannually or extraordinarily at the request of the State Bank of Vietnam;

c/ Performance of the tasks defined in Clause 10, Article 13 of this Law quarterly or extraordinarily at the request of the State Bank of Vietnam;

d/ Audited annual financial statements and annual operation reports;

e/ Other information on deposit insurance activities at the request of the State Bank of Vietnam.

2. Deposit insurers shall publicize information on revocation of deposit insurance participation certificates and plans on payment of insurance money to insured depositors under Clause 3, Article 16 and Clause 3, Article 26, of this Law.

Article 34.Provision of information ofthe State Bank of Vietnam

1. Deposit insurers may access the State Bank of Vietnam’s database on organizations participating in deposit insurance for performing their functions and tasks under this Law.

2. The State Bank of Vietnam shall allow deposit insurers to access the database on organizations participating in deposit insurance according to the Government’s regulations.

Chapter VI

INSPECTION OF AND COMPLAINTS ABOUT DEPOSIT INSURANCE

Article 35.Inspection of deposit insurance

1. The State Bank of Vietnam shall inspect deposit insurance.

2. Subject to deposit insurance inspection are deposit insurers and organizations participating in deposit insurance.

3. The rights and obligations of those subject to deposit insurance inspection comply with the Law on the State Bank of Vietnam and the inspection law.

4. The process of and procedures for deposit insurance inspection of organizations participating in deposit insurance comply with the Law on the State Bank of Vietnam and the inspection law.

5. The process of and procedures for deposit insurance inspection of deposit insurers comply with the inspection law.

Article 36.Complaints about deposit insurance

1. The settlement of complaints about administrative decisions or administrative acts on deposit insurance complies with the law on complaints.

2. The settlement of complaints about administrative decisions or administrative acts of deposit insurers is specified as follows:

a/ Deposit insurers have competence to settle first-time complaints about deposit insurance. Deposit insurers shall settle complaints within 15 days after receiving them;

b/ When a complainant disagrees with the first-time complaint settlement decision, or if past the specified time limit, a complaint is not settled, the complainant may lodge his/her complaint with the Governor of the State Bank of Vietnam;

c/ The Governor of the State Bank of Vietnam shall settle a complaint within 30 days after receiving it. If disagreeing with the complaint settlement decision of the Governor of the State Bank of Vietnam, the complainant may initiate a lawsuit before a court in accordance with law.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 37.Transitional provision

Deposit insurance certificates granted before the effective date of this Law remain valid.

Article 38.Effect

This Law takes effect on January 1, 2013.

Article 39.Implementation detailing and guidance

The Government shall detail and guide articles and clauses as assigned in this Law.

This Law was passed on June 18, 2012, by the XIII^thNational Assembly of the Socialist Republic of Vietnam at its 3^rdsession.-

Chairman of the National Assembly
NGUYEN SINH HUNG