TO SUPPLEMENT 02 OBJECTIVE DEDUCTED IN EVALUATE THE CAPITAL PRESERVATION OF THE DEPOSIT INSURANCE OF VIETNAM
On April 01, 2020, the Ministry of Finance promulgates the Circular No. 20/2020/TT-BTC on amending and supplementing a number of Articles of the Ministry of Finance’s Circular No. 312/2016/TT-BTC of November 24, 2016, prescribing financial regimes applicable to the Deposit Insurance of Vietnam.
Accordingly, the Ministry supplement 02 objective factors affect to capital and income of Deposit Insurance of Vietnam which shall be deducted in evaluate the capital preservation. They are: Using working capital to purchase long-term bonds of supporting credit institutions in accordance with law, thus affecting annual income; Selling government bonds, long-term bonds of supporting credit institutions or bills of the State Bank of Vietnam to pay insurance sums to depositors in case the professional reserve fund is not enough to pay deposit insurance sums.
In addition, this Circular also stipulates that the Deposit Insurance of Vietnam may use the balance of income from special loans provided to specially controlled credit institutions which are separately monitored to offset losses arising from irrecoverable special loans. In case the balance of income from special loans is not enough to offset losses, the Deposit Insurance of Vietnam shall report such to the State Bank of Vietnam for consideration and decision on use of the professional reserve fund for offsetting losses in accordance with law. However, the Deposit Insurance of Vietnam may not set aside provision for non-performing special loans.
This Circular takes effect on May 20, 2020.
