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|Customers buy gold bars at the Bank for Agriculture and Rural Development in Ha Noi. Credit institutions are no longer allowed to give loans to customers who want to purchase gold in any form. VNA/VNS Photo Tran Viet|
The SBV, in a document issued last week, said the regulation would strengthen the State's management of gold trading activities.
Banks, however, will be allowed to provide financing for genuine working capital requirements of jewellery traders and manufacturers, but only with the approval of the central state bank.
The SBV also told credit institutions that they should not turn gold deposits into other currencies, including dong. They also must not use gold deposits as collateral for loans from other credit institutions.
The central bank has asked credit institutions to carry out measures to collect their loans that are now in gold, or turn these outstanding loans into dong-denominated loans.
The banks are not allowed to extend terms on any loans in gold.
Also, according to the SBV document, customers must pay fees to credit institutions that keep their assets, including gold. However, the fees must be fully disclosed.
In an aim to manage gold services, the SBV will not allow credit institutions to pay interest rates, dividends, fees and other financial forms to depositors of gold.
The SBV decision is expected to slow down the number of gold deposits and curb the practice of commercial banks liquidising gold deposits for lending or for use as collateral for inter-bank loans.
The country's gold imports in the first quarter unexpectedly surged seven-fold against the same period last year.
The Ministry of Industry and Trade made the announcement but did not release the import value or export turnover of the metal.
As gold was listed in the group of goods whose import turnover put under State control, the sharp rise of its imports helped bring the total import value of the controlled goods group to climb by 42.3 per cent.
Without including gold, the total import value of the controlled goods declined 11 per cent due to a reduction in imports of steel and motorbike parts.
Export of precious metals and stones reached $485 million in the first quarter, nearly a quadruple increase from the same period last year.
The export value of gold in March alone was $400 million compared to $37 million in February.
Industry insiders attributed the unexpected change to the temporary import of gold for re-exporting in late February and early March, when the central bank authorised four commercial banks (Techcombank, Sacombank, DongABank and VietABank) to export non-SJC gold bars and import standardised gold with a combined volume of around 11 tonnes.
Imported material gold was then converted into gold bars by the SJC for the central bank to prepare for SBV's first gold bar auction held in March, the auction aimed to narrow the price gap between domestic and global markets.
However, after the bidding, the gold price in the domestic market is still roughly more than VND3.5 million per tael higher than the global price.