According to Circular 16/2012/TT-NHNN, unlicensed businesses and credit institutions are not allowed to buy and sell gold bars from January 10, 2013. To do gold business, companies must have at least VND100 billion of capital, said Nguyen Quang Huy, Director of Foreign Exchange Management, SBV.
According to Circular 16, will unlicensed businesses and organisations be wiped out?
In 2013, gold market price is created and controlled by the State Bank of Vietnam (SBV) which follows the guideline of “the economy keeps money, the State keeps gold." Therefore, to ensure the rights of the people, the SBV is reorganising the gold buying and selling network. We expect to license 14 companies and 17 credit institutions meeting conditions and requirements stated in the Government’s Decree 24/2012/ND-CP and the SBV’s Circular 16. Thus, there will be over 2,000 bullion buying and selling points in 63 centrally governed provinces and cities.
According to the Circular 16, from January 10, 2013, unlicensed businesses and banks are not allowed to purchase and sell gold ingots. This is the Government’s direction for the roadmap of eliminating gold dominance in the economy and closely managing the gold market to limit speculation.
What are criteria of licensed bullion-trading businesses?
Out of more than 8,000 gold bar shops across the country now, only 14 companies and 17 credit institutions with a total of 2,000 outlets, are licensed. Particularly, Ho Chi Minh City has about 900 gold jewelleries and Hanoi has 400 gold jewelleries.
According to the Government’s Decree 24-CP, the central bank will license these units. They are required to have a charted capital of at least VND100 billion and at least two years' gold trading experience. They are also required to have made tax payments of at least VND500 million from gold trading annually for two consecutive years and have branches in at least three centrally governed provinces and cities.
On December 28, 2012, the SBV issued the Circular 38/2012/TT-NHNN, stipulating that as of January 10, 2013, credit institutions are allowed neither to maintain the gold position at the closing of the working day over 2 per cent of their own capital, nor maintain the negative gold position. They must submit daily reports on gold status to the central bank.
Are businesses and credit institutions unlicensed to trade gold bars allowed to trade gold jewellery?
Shops without gold bar licences (over 5,600 shops) are still licensed to trade golden jewelleries.
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In 2013, gold market price is created and controlled by the State Bank of Vietnam (SBV) which follows the guideline of “the economy keeps money, the State keeps gold."
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Licensed businesses can also open more branches to serve the needs of the people.
At present, the SBV is directing companies and banks to actively promote their bullion buying and selling activities in their networks.
So, there will be many licensed gold shops. Does the SBV have any remedies to manage and prevent speculation?
The SBV will closely monitor the process of finalising gold deposit and lending balances at credit institutions. At the same time, it will speed up the processing of SJC gold bars from other brand names to support banks to repay gold to depositors.
When the gold market is stable, the central bank will submit to the Government a scheme to mobilise gold resources from the people to serve production and business activities.
The SBV will take part in the market as the creator and final buyer and seller on the bullion market to ensure the circulation of the precious metal and increase gold reserves. In my opinion, these measures will stabilise the gold market in 2013.
Thank you very much!
Vietnamese
