In late July 2025, the State Bank of Vietnam (“SBV”) released the draft Amended Law on Deposit Insurance (“Amended Law”) for public consultation. The Amended Law introduces substantial reforms to the Law on Deposit Insurance 2012 (“2012 Law”), including a new chapter on crisis management, expanded resolution powers for the deposit insurance organization, shortened payout timelines, broader investment channels, and stricter financial governance requirements.
Highlights of the Amended Law
1. A stronger toolkit to safeguard financial institutions
Article 14.14 significantly expands the authority of the deposit insurance organization, equipping it with a more robust and hands-on toolkit for managing member institutions in crisis.
This update replaces the general provisions of the 2012 Law with specific powers to act decisively. When an institution is under special control, the deposit insurer can now:
- Provide emergency funding through special loans.
- Support forced transfers by purchasing long-term bonds from the institution.
- Install new leadership by appointing qualified managers to key roles in people’s credit funds.
- Oversee all rescue strategies, including plans for recovery, merger, sale, or bankruptcy.
Essentially, these changes allow for faster and more effective intervention to protect depositors and ensure financial stability.
2. Premium payment exemptions and deferrals
Article 21 of the Amended Law exempts institutions under special control from paying deposit insurance premiums during the period of external control. Financially distressed institutions may defer unpaid premiums and penalties under an approved restructuring plan. By contrast, the 2012 Law required all members to pay premiums regardless of their financial condition. This reform provides flexibility for struggling institutions while maintaining scheme participation.
3. Shortened payout timeframe
Article 24 of the Amended Law reduces the standard payout period for deposit insurance claims from 60 days to 30 days after the obligation arises. In complex cases, the period may be extended up to 60 days. The previous uniform 60-day limit often caused delays. This change aligns more closely with international best practice and strengthens depositor confidence.
4. Expanded investment scope
Article 32 of the Amended Law broadens permissible investments beyond government bonds and SBV deposits. The deposit insurance organization may now:
- buy and sell bonds and certificates of deposit issued by majority state-owned commercial banks; and
- place deposits with such banks, provided they are not under special control.
These new investment channels diversify the portfolio of the deposit insurance organization while maintaining a conservative risk profile, subject to oversight of the Government of Vietnam.
5. Stricter financial, accounting, and audit rules
To boost financial oversight, Article 33 of the Amended Law now holds Vietnam’s deposit insurance organization to a higher standard of transparency and accountability. The organization’s finances must now adhere to Vietnamese accounting standards and be fully disclosed in annual statements, which will be independently audited by the State Audit Office. By also introducing clearer rules for managing profits and losses, these new regulations mark a significant improvement over the 2012 Law, ensuring the organization’s financial health is both sound and openly reported.
6. New chapter on crisis management
A major upgrade from the 2012 Law, the new Chapter VII of the Amended Law gives regulators a powerful toolkit to manage financial crises proactively. They are now empowered to:
- Inject emergency funds into struggling banks.
- Make large-scale payouts to keep the financial system stable.
- Ensure government rescue loans are repaid first.
- Collaborate on system-wide crisis solutions.
This proactive stance is funded by 0% interest loans from the SBV or premium surcharges and marks a clear strategic shift toward preventing and containing systemic risks.
Key takeaways
The draft Amended Law overhauls Vietnam’s system for protecting bank deposits, delivering greater security for savers and fortifying the stability of the entire financial system. This is achieved through a suite of powerful upgrades, including earlier intervention powers, faster payouts, more flexible investment strategies, and rigorous financial oversight.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
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