Local banks resume gold mobilising

DongA Commercial Joint Stock Bank was the first to cancel gold mobilisation in early July by charging a fee of 0.05 per cent of gold value for gold custody services, newswire Vnexpress reported.

However, the bank has recently resumed gold mobilisation at the interest rate of 1 percent per annum for all gold deposits, and these deposits must mature by November 25, 2012.

Similarly, Asia Commercial Joint Stock Bank (ACB) issued gold deposit certificates on one-month, two-month and three-month terms at an interest rate of 0.8 percent which must reach maturity before 25 November, 2012.

The date is the State Bank of Vietnam’s deadline for putting an end to gold mobilisation via gold certificate issuance by the local banking system.

In addition, the owners of ACB gold certificates that have yet to mature may still enjoy the preset interest rates. Those who own the certificates which will mature after 25 November, 2012 and don’t want to withdraw the gold deposited at the bank will receive no interest.

About 10 days earlier, the bank stopped issuing gold certificates, and indicated that the gold custody services would be applied for gold depositors having not withdrawn their gold before July 4, 2012.

Some other banks are now also receiving termed gold deposits beyond the date of November 25, 2012.

A client who has sent 10 taels of gold to Viet A Commercial Joint Stock Bank said the bank’s deposit rate applied for gold was 0.6 per cent per year for all maturities. But the bank will not issue any more gold certificates to mobilise gold in accordance with the central bank’s regulation.

Normally, only banks suffering a negative gold position would be allowed by SBV to mobilise gold, said Nguyen Thanh Toai, deputy general director of ACB.

“Previously, we were forced to postpone gold mobilisation, yet now the central bank gave a nod to our issuance of short-term gold certificates which is a normal banking activity”, he added.

In addition, there have not been any regulations on the gold mobilisation ceiling rate so far, which would enable lenders to make flexible adjustments according to their own situations.

Another manager of a joint stock commercial bank said that gold mobilisation would end once the gold position returned to positive on customers’ repayment of existing outstanding gold loans which have not yet been repaid.

In all likelihood, gold has now been mobilized at higher interest rates than before so as to be converted into Vietnam dong for lending. Even gold depositing at 1 percent or 2 per cent would be much more beneficial than attracting the dong at 9 per cent, according to a banking expert.

Earlier, gold interest rates at many banks jumped from 3-4.6 percent per year after the implementation of Circular No.12 of the SBV giving the extension for gold mobilizing via short-term gold certificates until November 25, 2012 instead of May 1, 2012 as specified in Circular No.11, dating back to April 29, 2011.

The newly emerged situation forced the SBV to issue Document No. 3854 requiring credit institutions to terminate gold lending and depositing on June 25, 2012.

Following the new rule, gold depositing interest rates have fallen sharply again, down close to 0 percent, and banks have even stopped mobilising in order to turn to custody services to charge fees on depositors.