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Banks rush to mobilize capital in gold
Embryonic signs of a gold mobilization race appeared before the State Bank of Vietnam issued the Circular No.32 to stabilize the gold market, and have become clearer.
The circular was issued on October 6, allowing some commercial banks to sell gold to stabilize the domestic market and resume gold trade on accounts. The circular, once again, reminded people of the policy on not allowing to mobilize capital in gold and lend in gold which was set up in April 2011.
Under the policy, banks only can issue short term gold deposit certificates, while the certificate issuance must finish on May 1, 2012.
However, after a period of obeying the new regulation, since early October, just several days before the circular 32 was issued, the race for issuing gold certificates was kicked off.
ACB’s gold certificate interest rate has increased to 0.85 percent per annum for 1-month term deposit and to 1.3 percent per annum for 11-month term deposit.
Prior to that, the bank once raised the gold deposit interest rate to 0.75 percent per annum from 0.55 percent, the rate which was set in June.
As such, the move of increasing the interest rate was made before the State Bank of Vietnam allowed five banks and one goldsmith company to sell gold to stabilize the market on October 6.
The officer of the ACB’s transaction division in Hanoi has affirmed that a program on offering bonus interest rates has been launched, under which the customers who deposit more than 50 taels of gold for 2 months or longer, can enjoy the bonus interest rate of 0.2 percent (the current rates are 1.05-1.15 percent per annum). As such, if enjoying the bonus interest rates, big depositors would get the interest rates of 1.25-1.35 percent.
Meanwhile, Eximbank says that it only keeps gold for customers and pays higher revenue to customers. An officer of the Hanoi branch of the bank said that the revenue paid by the bank has increased to 1.5 percent per annum from one percent.
Other banks are also paying higher for gold deposits. Vietnam Tin Nghia is paying 2.2 percent per annum at the highest. Meanwhile, Phuong Nam pays 1.5 percent per annum, and Viet A offers the interest rate of 2 percent per annum at the highest, applied to 3 month term deposit.
Nguyen Thanh Toai, Deputy General Director of ACB, said that banks have to raise the gold deposit interest rates in order to serve the market stabilization task assigned by the State Bank of Vietnam. When people have demand, banks need to increase the deposit interest rates in order to attract more gold to banks, and make gold serve the banks.
Regarding the interest rats, Toai said that there is no regulation on the ceiling gold deposit interest rate; therefore, banks have the right to set gold deposit interest rates at the levels they believe are reasonable.
Toai believes that when the domestic gold price is only higher by 400,000 dong per tael than the world’s price as expected by the central bank, will the gold deposit interest rates go down.
However, doubts have been raised that some banks raise gold deposit interest rates just because they want to convert gold into dong in order to settle the liquidity problem.
Tran Hoang Ngan, a well known economist, also thinks that some banks increase the interest rates because of the weak liquidity. He has suggested to set a cap of 0.5 percent per annum on gold deposit interest rates.
Nguyen Duc Huong, Deputy Chair of Buu Dien Lien Viet Bank, said that the State Bank should allow banks to mobilize gold, because Vietnamese people still keep the habit of hoarding gold. However, Huong believes that the gold deposit interest rate should not be higher than one percent per annum
vietnamnet, VnExpress
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