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New rules on gold trading proposed
Specific regulations on gold trading will be issued soon to ensure the rights and benefits of people who keep assets in the precious metal, says Nguyen Dong Tien, Deputy Governor of the State Bank of Viet Nam (SBV).
The Lao Dong (Labour) newspaper yesterday quoted Tien as saying strict controls would however be maintained over gold transactions as part of efforts to stabilise the economy.
The newspaper cited experts as saying they were concerned the SBV circular banning gold deposit mobilisation and lending operations that took effect on May 1 would freeze a large volume of assets kept by the people, preventing it from being used to serve the economy.
Gold mobilisation was highest in HCM City, accounting for nearly 76 per cent of national total, with Ha Noi a distant 11.7 per cent and 31 other localities making up the reminder, he said.
Tien said the decision to ban gold lending and acceptance of deposits by commercial banks would not have any impact on most people in the countryside, because the majority of them did not make savings in the precious metal, and had little demand to trade in it.
As far as credit organisations were concerned, the SBV has made sure they had enough time to adjust their operations in an effort to prevent business risks. They have agreed with the decision and support it, Tien said.
He said the central bank would strictly monitor the market to ensure compliance with the decision by banks.
Tien said the central bank's decision was prompted by unpredictability and fluctuations in gold prices, which had led to increased speculation and illegal import of the precious metal. This, in turn, had negative impacts on the monetary and foreign exchange markets, he added.
Under Circular 11 issued by the State Bank of Viet Nam that took effect as of May 1, 2011, credit organisations cannot provide gold loans to customers and other credit organisations or fulfill gold credit contracts already signed but not yet disbursed or partially disbursed.
Commercial banks are also not allowed to deposit gold with other other credit organisations.
In terms of gold mobilisation, banks cannot accept gold savings, but they can mobilise gold by issuing short-term certificates of deposits to repay depositors if they do not have enough of the precious metal in store.
However, these short-term certificates can only be issued until May 1 next year.
Banks cannot convert mobilised gold into other currencies. The amount of gold that they have used to make dong loans has to be retrieved no later than June 30 this year.
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