Hot topic of mortgaging social insurance book to execute credit contract

Recently, the Social Insurance Agency of Phu Yen province received a dispatch from a transaction office of a commercial bank located in Tuy Hoa city requesting coordination to prevent the issuance of new social insurance books and payment of benefits after employees have mortgaged their social insurance books to borrow money.

Meanwhile, in some other localities, there has been a situation where, after mortgaging, workers report the loss of their social insurance books to be reissued new ones.

Some workers mortgage their social insurance books at the bank. (Illustration photo)

Mr. Tran Quang Vinh, Director of Social Insurance of Phu Yen province said: "KNot only in Phu Yen, but many localities nationwide have this situation. Therefore, if a social insurance unit resolves it, all agencies in the unit in the social insurance system will not be able to resolve this social insurance book for the whole year.

There are currently no specific statistics on the number of workers mortgaging their social insurance books at banks, but this reality is happening in many localities in the province.

According to the new Social Insurance Law, employees have full rights to manage and use their social insurance books or authorize them according to the provisions of the law. And this is the basis for creating credit contracts between banks and employees.

Lawyer Nguyen Huong Que, Phu Yen Provincial Bar Association said: "According to the law, this case is not prohibited by law. Social insurance records are also valuable assets. Therefore, the bank's agreement to lend according to the provisions of the Civil Code is appropriate."

Master Trinh Thi Lac, lecturer at Banking Academy, Phu Yen Branch, commented: "The property to be mortgaged must ensure legal conditions. First, it must be owned by the guarantor; Second, it is important to the transferee. But in this case, the social insurance book does not stipulate the permission to transfer. Therefore, the rights of the secured person to the secured property are not affirmed. Therefore, it should only be considered as a measure to bind the customer's desire to repay the debt, instead of using it as a second source of debt repayment.

Thus, although the new Social Insurance Law allows employees to re-apply for insurance books anywhere, there will be no overlapping payments from the insurance agency.

This reality not only causes chaos in the issuance of certificates but also contains high risks for commercial banks if borrowers do not fulfill their loan repayment obligations.

According to Phu Yen Provincial Social Insurance, the social insurance book is not a mortgaged asset. This book only has legal value when the social insurance agency is responsible for handling the procedures to resolve the regimes for employees according to the provisions of law.

Mr. Tran Quang Vinh, Director of Phu Yen Province Social Insurance added: "This book is only valid when the employee brings the book to the Social Insurance agency to request policy settlement."