DECREE

ON DEPOSIT INSURANCE

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30,1992;
Pursuant to Credit Institutions Law No. 02/1997/QH10 of December 12, 1997;
At the proposal of the Vietnam State Bank Governor,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- This Decree prescribes the deposit insurance operation in Vietnam, aiming to protect the lawful rights and interests of money depositors, contribute to maintaining the stability of credit institutions and ensure the safe and healthy development of banking operations.

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1. Credit institutions and organizations other than the credit institutions which are allowed to carry out a number of banking operations prescribed by the Law on Credit Institutions and take deposit money from individuals shall have to participate in the compulsory deposit insurance;

2. Organizations participating in the deposit insurance or the deposit insured shall have to post up their participation therein at their offices and transaction locations.

Article 3.- The deposit money to be insured shall be Vietnam dong deposited by individuals at the deposit insured.

Article 4.-

1. The maximum insurance money amount to be paid to all deposits (including both principal and interest) of an individual at the deposit insured shall be 30 million Vietnam dong.

2. The alteration of the maximum insurance money amount prescribed in clause 1 of this Article shall be decided by the Prime Minister.

Article 5.-

1. The deposit insurers are the State-run financial organizations which operate for non-profit purposes, ensure capital safety and cover their expenses with their own revenues. They have the legal person status, their own sheets of balance, their own seals and are allowed to open accounts at domestic and overseas banks, provided with charter capital by the State and exempt from taxes.

2. The Prime Minister shall decide the establishment of deposit insurers and ratify their organization and operation charters.

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Chapter II

DEPOSIT INSURANCE OPERATIONS

Section 1. DEPOSIT INSURANCE PREMIUM

Article 6.-

1. The deposit insured shall have to pay the deposit insurance premium at the rate of 0.15%/year calculated on the average deposit balance of all individuals thereat. This deposit insurance premium level shall be adjusted by the Prime Minister’s decisions based on the proposals of the deposit insurers and opinions of the State Bank as well as the Ministry of Finance.

2. The deposit insured may account the deposit insurance premiums into their operating costs.

Article 7.- The deposit insurance premium shall be calculated and paid four times in a fiscal year as prescribed by the State Bank.

Article 8.- The deposit insured which violate the regulation on the premium payment time limits shall, besides having to fully pay the outstanding premium amount, be subject to a fine of 0.1% (one per thousand) of the overdue amount for each day of late payment.

Article 9.- If after 30 days from the deposit insurance premium payment deadline, the deposit insured fail to pay the deposit insurance premium and the fine, the deposit insurer shall have the right to:

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2. Request the credit institution and/or the State Treasury where the deposit insured opens account(s) to make deduction therefrom for payment of the deposit insurance premium and the fine if it is an organization other than a credit institution, which is allowed to conduct some banking operations.

Article 10.-

1. If the deposit insured fails to pay the overdue insurance premium for three months from the payment deadline, the insurer shall terminate the insurance and make the announcement on the mass media, and at the same time request the competent State body to issue a decision to stop the mobilization of deposit money from individuals by such deposit insured.

2. The deposit insurer shall have to provide insurance for the insured amount of money of the deposit insured within 06 months from the date the decision to terminate the deposit insurance is issued.

Section 2. RISKS SUPERVISION AND HANDLING MEASURES

Article 11.-

1. The deposit insured shall have to submit to the deposit insurer all reports as provided for by the latter.

2. The deposit insured shall have to immediately report to the deposit insurer on the following cases where :

a) They meet with difficulties in their payment capabilities;

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3. Within 90 days after the end of the fiscal year, the deposit insured shall have to send to the deposit insurer the annual financial statements.

Article 12.-

1. Upon detection that the deposit insured has violated regulations on safety in banking operation, the deposit insurer may request the deposit insured to take remedial measures and at the same time to report in writing to the State Bank.

2. Where it deems that the operation of the deposit insured may lead to the loss of payment capability or great material loss or may cause serious impacts on other credit institutions, the deposit insurer shall have the right to request the deposit insured to take timely measures and at the same time to report to the State Bank so that the latter may apply urgent handling measures.

Article 13.-

1. The deposit insurer shall have to periodically supply information on the operations of the deposit insured to the State Bank and concerned competent State bodies.

2. The deposit insurer may conduct inspection of the observance of the provisions of this Decree by the deposit insured.

3. The State Bank inspectors shall have to supply the results of the inspection and supervision of the deposit insured to the deposit insurer; coordinate the timely handling of the deposit insured being in danger of losing their payment capability, violating regulations on banking operations and being badly in debts.

4. Where a credit institution is placed in the state of special control, the special Control Board shall have to periodically notify the situation on the operation of such institution to the deposit insurer for coordination in handling thereof.

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Article 14.-

1. Where the deposit insured is in danger of losing its payment capability but not to the extent of being placed under the state of special control, the deposit insurer may support it in the following forms:

a) Providing support loans to pay the insured deposits;