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State Bank vows to protect gold owners
Entities and individuals who have bent or otherwise deformed gold bars, or are holding non-SJC bullion should not sell them at low prices now, says State Bank of Viet Nam Deputy Governor Le Minh Hung.
Speaking with the media on Friday he advised that those who have such gold wait and avoid losses.
Hung said the central bank is preparing regulations on production of SJC (Sai Gon Jewellery Company (SJC) -branded gold bars, and the new regulations will soon be released.
These new policies would include the rules on exchanging "deformed" gold bars or non-SJC branded bullions for qualified SJC bars.
The spirit of the new regulations is that all bent and buckled SJC gold bars, and all non-SJC gold bars that still meet other standards of quality and weight can be exchanged for SJC bars if the owners choose, he said.
As stipulated in Decree No 24/2012/ND-CP on gold trading management dated May 25, 2012, the State holds monopoly over gold bar production. The SBV has been assigned by the Government to manage it, Hung said.
The decree renders invalid all licences for gold bar production granted previously by SBV including the licence for Sai Gon Jewellery Company (SJC).
However, SJC gold bar brand enjoys long-term prestige and quality, and has been accepted by the market. In addition, the SJC has taken up a major market share in the domestic gold market.
Therefore, to save costs for the State and society as well as to avoid disruption in gold bar trading and production, the central bank consulted with the Government and the HCM City People's Committee and reached an agreement on selecting SJC as the State brand, the deputy governor said.
As of now, SJC is not allowed to conduct further production of gold bars while it continues to carry out normal business activities such as buying and selling (or rejecting) SJC gold bars as well as non-SJC bullion in line with current regulations.
Worried
It is a fact that during the process of transportation and trading of gold bars, it is inevitable that certain bars are deformed while their value and weight remain unchanged.
Sai Gon Jewellery Company (SJC) has bought back about 7,000 taels of deformed gold bars worth hundreds of billions of dong from the market. However, the company has not yet received permission from the central bank to reprocess them into normal gold bars.
Therefore, the gold trader stopped buying deformed bullion on August 14.
Nguyen Cong Tuong, deputy head of SJC sales department said that the company had to borrow funds from banks to buy back gold from the public, but if it cannot reprocess them, its working capital is affected.
"SJC has submitted a document to the central bank asking for permission to reshape the deformed bars, but we have not received any response," Tuong said.
Many people are very worried about the SJC's refusal to buy back its own deformed gold bars.
Additionally, many gold shops have refused to buy non-SJC gold bullion from the people, and others have tried to get them at lower prices although the central bank in its decree does not discriminate between SJC and non-SJC-gold bars.
Even if they are sold to the original manufacturers, the prices of non-SJC gold bars are now below listed prices.
Hung said that since the State has selected SJC as the State brand, all kinds of SJC gold bars are legal and eligible, but in case where certain gold bars are bent or otherwise deformred in the process of circulation, the SBV (which is considered as the State monopoly agency in production of gold bars) will do its best to reprocess these to protect the interest and benefit of those who own them.
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