The draft Deposit Insurance Law was discussed at the NA working session on Wednesday. Several NA delegates disagreed with the draft which specifies that only deposits in Vietnam dong would be covered by insurance. They suggested that the insurance coverage be expanded for gold and foreign currency deposits as well.
The deputies argued that the foreign exchange management policy only prohibits payment in foreign money. In addition, the State does recognize gold and foreign currency deposits and is now calling for overseas remittances, thus there needs to be insurance for such assets.
Besides, insurance for gold and foreign currency deposits would damage the confidence in the dong stability and likely disturb the monetary market.
Deputy Tran Hoang Ngan of HCMC stressed: “The goal of Deposit Insurance Law is to protect depositors. Then, foreign currency depositors also need to be protected.”
“Deposits in foreign currencies make up a large portion of the total mobilized capital in the banking system. If this kind of deposits is not covered by insurance, then when uncertainties occurred, would the system safety be ensured?” Ngan wondered.
Nguyen Thanh Hai of Hoa Binh noted if insurance for deposits in foreign currencies is available, banks will have more chances to mobilize foreign money, which will help restrict dollarization.
Meanwhile, Touneh Drong Minh Tham of Lam Dong said citizens currently keep a huge amount of gold. If insurance for gold deposits is regulated by law, people will entrust their gold to credit institutions.
However, Nguyen Van Giau, chairman of the NA Economic Committee, said insurance for deposits in gold and foreign currencies might lead to misunderstanding that the State encourages accumulation of foreign currencies and precious metals, which is inconsistent with the foreign exchange policy.
The draft Deposit Insurance Law says only individual depositors will get insurance. The NA Standing Committee explained the State agencies, socio-political organizations and businesses do not have temporarily idle funds.
However, NA deputies suggested expanding the scope of deposit insurance coverage to enterprises and organizations as well.
Deputy Nguyen Thai Hoc of Phu Yen wondered: “If an organization has a legitimate need for deposit insurance, will it be insured? There are organizations currently managing many funds with a huge amount of money. They have demand for deposits and insurance. Therefore, there should be regulations for these funds to get insurance.” SGT