Under fire Deposit Insurance Law can do the job

National Assembly’s Economic Committee deputy chairman Nguyen Duc Kien told VIR why this is not the case.

Many National Assembly deputies said Vietnam has huge gold and dollar deposits in the community. Hence, it would be hard to raise these asserts from people if they are not insured by banks and credit organisations. Do you agree with this?

Commercial banks raising gold and foreign currencies from local people is not relevant to the fact where these assets will be insured or not. Raising and managing gold, and protecting gold ownership rights of people is reflected in the draft Decree on Gold Management and the draft Plan on Raising Gold from the Community which propose different ways of raising gold such as issuing gold certificates or allowing account-based gold trading.

Gold is used as a means of payment in Vietnam. It is irrational in monetary governance facets, hence that practice needs a correction. In respect to foreign currencies management, as a state management agency in monetary field, the State Bank does not effectively guide the banking system in converting foreign currencies into dong and vice versa to service people’s needs.

In fact selling dollars is much easier than buying them. That is one of key reasons why local people have been cautious in depositing dollars, but not due to insurance issues.

Deposited gold and foreign currencies not being insured will scare depositors. Is that true?

Vietnam’s constitution and laws respect gold and foreign currencies ownership rights of people and the state encourages people to put gold and foreign currencies into national economic development, but not to keep them in safes.

For those owning gold and hard currencies not wanting to deposit them at banks or sell to banks, the government urges banks to roll out added value services to attract customers.

In respect to the draft plan to raise gold from the community the State Bank pursues the orientation of making people aware depositing gold at banks would benefit people themselves, firms and the state alike. However, it requires central banks to take more drastic actions, better governance and scale up check and inspection to ensure the plan would come up with success.

Is the Deposit of Vietnam (DoV) up to the job?

The DoV came into existent 12 years ago. In the inception it was operating using state capital entirely. Its capital sources have now been added with premiums raised from credit organisations.

In the past years, the DoV has effectively addressed a number of risks. For instance, it directly involved in settling poor liquidity of scores of people’s credit funds in different localities.