Perfecting Vietnam's deposit insurance law in the current period

COMMITMENT

I hereby certify that this thesis is my own research work. The data and results presented in the thesis are honest and have clear sources.

Hanoi, date month year 2008

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AUTHOR

Bui Huu Toan

INDEX

PREFACE1

CHAPTER 1: OVERVIEW OF DEPOSIT INSURANCE6

1.1 Concept, purpose and role of deposit insurance6

1.1.1 Concept of deposit insurance6

1.1.2 Purpose of deposit insurance12

1.1.3 The role of deposit insurance in a market economy15

1.2 The formation and development process of deposit insurance22

1.3 Legal regulation of deposit insurance25

CONCLUSION29

CHAPTER 2: VIETNAMESE LAW ON DEPOSIT INSURANCE 31

2.1 The process of formation and development of Vietnamese law on protection31

deposit insurance

2.2 Current regulations of Vietnamese law on money insurance35

send

2.2.1 Regulations on subjects in deposit insurance relations35

2.2.1.1 Insurance organization35

2.2.1.2 Insurance participating organizations52

2.2.1.3 Beneficiaries of deposit insurance57

2.2.2 Legal provisions relating to insured money60

2.2.2.1 Type of currency insured60

2.2.2.2 Insurance payment limit63

2.2.2.3 Insurance premium67

2.2.2.4 Insurance payment69

CONCLUSION73

CHAPTER 3: SOME RECOMMENDATIONS TO CONTRIBUTE TO THE IMPROVEMENT OF LAW 76

LAW ON DEPOSIT INSURANCE OF VIETNAM IN THE CURRENT PERIOD

3.1 Current status of Vietnamese law on deposit insurance and the need76

must be completed in the current stage

3.1.1 Current status of Vietnamese law on deposit insurance76

3.1.2 The need to improve the law on deposit insurance of85

Vietnam in the present stage

3.2 Some recommendations to contribute to improving the law on money insurance87

Vietnam's current period

CONCLUDE93

LIST OF REFERENCES95

PREFACE

1. Urgency of the topic

Along with the development of the national economy, the operation of the Vietnamese banking system has achieved encouraging results. Thereby, the banking system has somewhat affirmed its position in the role of providing capital for the economy. In the process of development, the products and services that banks bring to the economy are increasingly diverse and abundant. However, the most basic and important activity of banks is to mobilize capital from the public by receiving deposits in certain forms and using that money to provide capital to other entities in need in the economy. Thus, it can be said in general that the basic activity of banks is to borrow to lend - this is the main cause of the risk that is always hidden in banking activities. On the other hand, the biggest characteristic of banking activities compared to other types of enterprises is its highly systematic nature. Therefore, when a risk occurs, the failure of a bank can very likely lead to the failure of the entire system, and can even cause panic in the entire economy. To deal with this problem, Vietnam, like other countries, has applied many measures through the promulgation of legal regulations to bring about the highest possible level of safety in banking activities.

From another perspective, to ensure the stability of banking operations, it is impossible not to consider the safety of depositors. Because depositors are the partners who provide capital to banks - an amount of capital that plays a decisive role in the amount of money that banks can use to provide to the economy.

Thus, the issue of protecting depositors and protecting the safety and sustainability of banking operations must be considered simultaneously and always have a dialectical relationship with each other. Therefore, the appearance of deposit insurance is considered

such as activities that harmoniously combine interests, on the one hand protecting the interests of depositors, on the other hand creating favorable conditions for the existence and safe and sustainable development of the banking system.

That need of the economy is the objective reason for the emergence of a new legal field - the law on deposit insurance. In Vietnam, the issue of deposit insurance was mentioned since 1994 according to Decision No. 101/TCQD-BH on promulgating the rules for liability insurance of people's credit funds for term deposits - this is the first legal document of Vietnam on deposit insurance. However, deposit insurance in this period was only one of the business lines of Bao Viet - an enterprise specializing in commercial insurance.

Subsequently, deposit insurance activities were separated into an independent and specialized activity according to Decree No. 89/1999/ND-CP dated September 1, 1999 on deposit insurance and this activity was carried out by the Vietnam Deposit Insurance Organization, which was established according to Decision No. 218/1999/QD-TTg dated November 9, 1999. Next, on March 16, 2000, the State Bank of Vietnam issued Circular No. 03/2000/TT-NHNN guiding the implementation of Decree No. 89/1999/ND-CP on deposit insurance. After a period of application, Decree No. 89/1999/ND-CP revealed certain limitations, so on August 24, 2005, the Government issued Decree No. 109/2005/ND-CP amending and supplementing a number of articles of Decree No. 89/1999/ND-CP and on April 25, 2006, the State Bank of Vietnam issued Circular No. 03/2006/TT-NHNN replacing Circular No. 03/2000/TT-NHNN.

Thus, it can be seen that the provisions of the law on deposit insurance in Vietnam are a new and quite important legal field in the system of legal provisions regulating relations arising in the financial-banking field.

Although it is a newly formed legal field in Vietnam, the law on deposit insurance has gradually been improved and partly meets the requirements of economic reality.

However, all current legal documents of Vietnam only exist in the form of sub-law documents, are not highly codified, have not created a stable legal corridor, are not synchronous and consistent with other related legal documents and many regulations have shown incompatibility with practical requirements. On the other hand, deposit insurance activities in Vietnam have had certain developments in the experimental period since 1999 up to now and more specifically, in the current period, when we are increasingly integrating deeply and widely into the international economy, the need to perfect the legal system in general and the law on deposit insurance in particular becomes more and more necessary. That has both theoretical and practical significance. Therefore, we boldly chose the topic " Improving the law on deposit insurance in Vietnam in the current period " as the topic for our master's thesis.

2. Research situation

There have been several research topics related to deposit insurance and deposit insurance law. For example: " Solutions to develop deposit insurance activities in Vietnam " - Dr. Nguyen Thi Kim Oanh; " Law on deposit insurance in Vietnam " - Master Nguyen Van Hoai; Dr. Le Thi Thu Thuy - " Building laws on protecting the rights of depositors " - Legislative Research Journal - No. 6, 2007; Dr. Le Thi Thu Thuy - " Deposit insurance model in the period of international economic integration " - Law Journal - No. 12, 2007... However, all of those research topics either go into depth about deposit insurance activities, deposit insurance policies from an economic perspective or research deposit insurance law but in the previous period when the provisions of the law on deposit insurance have now changed a lot or only mention

refers to an aspect of the law on deposit insurance. Therefore, we realize that it is necessary to comprehensively study the provisions of the current law on deposit insurance in Vietnam, assess the current status of the regulations and analyze the requirements of practice to make recommendations to contribute to the improvement of the law on deposit insurance in Vietnam in the present period.

3. Research purpose of the thesis

The purpose of the thesis is to analyze theoretical issues on deposits and deposit insurance, clarify the purpose and role of deposit insurance for the economy. On the basis of pointing out the need for legal adjustment to deposit insurance activities, analyzing the provisions of current Vietnamese law on deposit insurance and assessing the current status of the regulations to thereby point out the shortcomings and make recommendations to contribute to improving the law on deposit insurance of Vietnam in the current period to suit the requirements of development and international integration.

4. Research object and scope

The research object of the topic is the provisions of current Vietnamese law on deposit insurance - the legal field regulating deposit insurance activities in Vietnam, determining the relationship of these provisions in the overall provisions of the law on finance and banking. Within the scope of this thesis, we do not delve into all issues on deposit insurance but only analyze the legal aspects, theoretical basis and content of the provisions of Vietnamese law on deposit insurance, and at the same time refer to the provisions of the laws of some countries on the field of deposit insurance such as the law on deposit insurance of Korea, the law on deposit insurance of the United States... from which, make scientific recommendations expressing our views to improve the law on deposit insurance of Vietnam.

5. Research methods

In order to carry out the research on the topic to achieve the above objectives, we use dialectical materialism and historical materialism as the methodological basis. In addition, we use some specific research methods such as statistical method, comparative method, analysis-synthesis method to clarify the content of the topic.

6. Thesis layout

In addition to the introduction, conclusion, table of contents, and list of references, the thesis includes three chapters organized as follows:

Chapter 1: Overview of deposit insurance

Chapter 2: Vietnamese law on deposit insurance

Chapter 3: Some recommendations to contribute to improving the law on deposit insurance in Vietnam in the current period.