PDIC, Deposit Insurance of Vietnam forge deposit insurance pact

MANILA, Philippines — State-run Philippine Deposit Insurance Corp. (PDIC) continues to strengthen the country’s cross-border cooperation with other countries as it signed an agreement with the Deposit Insurance of Vietnam (DIV).

PDIC president Roberto Tan and DIV chairman Nguyen Quang Huy recently signed the memorandum of understanding (MOU) to strengthen cross-border cooperation on deposit insurance.

This is the ninth cross-border cooperation pact signed by PDIC. The Philippines has similar arrangements with its counterparts from Indonesia, Japan, Korea, Malaysia, Thailand, Russia, the United Kingdom and the US.

Under the recently signed agreement, PDIC and DIV will undertake knowledge and experience sharing to mutually enhance the effectiveness of their respective deposit insurance systems.

“The agreement also provides for the exchange of views on the impact and implementation of international standards, as well as reinforce cooperation on deposit insurance issues,” PDIC said in a statement.

The MOU, effective for five years, may be extended for another five years upon written consent by both deposit insurance agencies.

Both PDIC and DIV are members of the International Association of Deposit Insurers (IADI) and the partnership is consistent with the core principle on cross border cooperation that promotes formal information-sharing and coordination arrangements among agencies in relevant jurisdictions.

PDIC was established in 1963 through Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance.

Effective 2009, the maximum deposit insurance coverage was increased to P500,000 per depositor. All deposit accounts by a depositor in a closed bank  maintained in the same right and capacity shall be added together.

The Bangko Sentral ng Pilipinas (BSP) has so far closed 12 problematic banks this year as it continues to rid the industry of weak players. These institutions were placed under the receivership of the PDIC.