Bankruptcy of the bank, are depositors' rights guaranteed?

The National Assembly has just passed the Law on Amendments and Supplements to a number of articles of the Law on Credit Institutions, including provisions on cases of bankruptcy of weak banks.

Specifically, according to the provisions of the recently passed law, there are 5 restructuring options for specially controlled credit institutions, the worst option being bankruptcy.

Through discussion, a senior leader of the State Bank said that this is just a step to continue perfecting the legal framework in managing the operations of credit institutions, as well as in the restructuring process.

Responding to questions from the National Assembly last week, Governor Le Minh Hung affirmed that in any case of handling options for credit institutions, the first goal must be to ensure economic security, ensure social order and safety, ensure the safety of the banking system, maintain the trust of depositors and protect the legitimate rights and interests of depositors - Photo: Thanh Nien.

"This is simply a step to complete the legal framework. In reality, there is no specific plan or case set out at this stage. The restructuring process is still focusing on implementing the project approved by the Prime Minister," the leader affirmed.

In fact, bank bankruptcy is not a new regulation, direction or plan.

Twenty years ago, the solution to bank bankruptcy was stipulated and mentioned in the Law on Credit Institutions in 1997, then the revised law in 2010. Even the Bankruptcy Law in 2014 has a separate chapter on bankruptcy of credit institutions.

Now, the Law on Amendments and Supplements to a Number of Articles of the Law on Credit Institutions, which has just been passed, continues to be amended to create legal consistency and perfection.

Or most recently, as in Decision No. 1058/QD-TTg of the Prime Minister, approving the project to restructure the system of credit institutions associated with bad debt settlement in the period 2016-2020, bankrupting weak banks is also one of the identified solutions.

Specifically, the project sets out the direction: "Create conditions for healthy joint-stock commercial banks, finance and financial leasing companies to develop and resolutely and thoroughly handle weak joint-stock commercial banks, finance and financial leasing companies that pose a great risk to the credit institution system, including measures of dissolution and bankruptcy according to the provisions of law, but ensure that it does not affect the safety and stability of the credit institution system".

In the worst and final scenario, where bankruptcy must be carried out in some future case, the principle is to be cautious, to ensure the interests of depositors and to maintain the stability and safety of the system.

And, the solution to bankrupt a credit institution according to the law is only implemented when the bankruptcy does not greatly affect the safety and stability of the credit institution system, and the rights and interests of depositors.

Responding to questions from National Assembly deputies last week, State Bank Governor Le Minh Hung affirmed: "In any case of handling options for credit institutions, the first goal must be to ensure economic security, ensure social order and safety, ensure the safety of the banking system, maintain the trust of depositors in the banking system and protect the legitimate rights and interests of depositors. Whenever choosing any solution, that goal must be guaranteed."

The Governor also emphasized that in different situations, there are different solutions and policies, but the consistent goal in management is to always ensure safety, trust, rights and interests of depositors.

With the current weak performance of banks, the Governor said that the reduction of operating costs is being accelerated to reduce losses and enhance the recovery of bad debts and the handling of collateral assets. Basically, the initial operations of this bank have temporarily stabilized and accumulated losses have also gradually decreased.

The State Bank has reported to the Government to develop a project to handle these banks, with different solutions. The Government has also met and just issued a resolution to finalize specific handling plans, in which the number one priority is to invite investors with financial capacity and experience to participate.

Currently, the State Bank is negotiating and looking for new investors to participate in restructuring these banks.

According to vneconomy