Vietnam will not insure gold and dollar deposits: draft law

Deposits in Vietnam dong will be insured against banks’ solvency while gold or dollar denominated deposits will not, the draft law on deposit insurance proposed.

Vietnam law makers are discussing a draft law on deposit insurance which stipulated that only deposits in Vietnamese dong will be insured against banks’ solvency while gold or dollar denominated deposits will not, in an attempt to fight against dollarization and stabilize forex market.

Deposit insurance will be applied for individual’s dong-denominated deposits but not for deposits by those who own 5% chartered capital of the deposited banks, the draft specified.

The Economic Committee of the National Assembly agreed on the draft law, explaining that it will help to prevent dollarization in the country. The new law is in line with international practices, Chairman Nguyen Van Giau emphasized.

However, Phung Quoc Hien, Chairman of the National Assembly Finance and Budget Committee, disagreed on the new regulation, arguing that a large proportion of deposits in the banking system are in foreign currency.

The draft should clarify the insurance beneficiaries, insurers, premiums and uninsured foreign currencies, the local online newspaper quoted Nguyen Thi Kim Ngan, Vice Chairwoman of the National Assembly, as saying.

The State Bank of Vietnam is permitted to decide on the deposit insurance premiums. The Prime Minister will set the upper premium thresholds for specified periods upon the recommendations of the SBV.

Source Sophie/ News Writer/ StoxPlus

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Oct 12 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry