Banks raise gold deposit rates

Sep 12th at 13:05

12-09-2012 13:05:33+07:00

Although there are only two months left until the end of gold mobilisation through gold certificates, many banks are still mobilising gold with higher deposit rates.

Specifically, Asia Commercial Bank (ACB) quotes deposit rates for 1-2 month certificates of deposit in gold at 1.4 percent per year. If more than ten taels are deposited, clients will earn an extra 0.2 percent percentage point.

Such a rate is high compared to the average gold deposit rate, whereas ACB earlier announced to mobilise gold with a deposit rate of 0.8 percent per annum, with maturity dates prior to November 25, under the regulations of the central bank.

The annual interest rate of 1.6 percent for gold deposits of over ten taels is also applied at Eximbank. Those depositing fewer than ten taels are subject to a rate of 1.4 percent per year, which is applicable since last Thursday.

On the same day, Sacombank raised its gold deposit rate to 1.6 percent for 1-2 month terms, applicable to all deposit volumes.

On the other hand, several banks are offering very low gold deposit rates. For example, at Southern Bank, the rate is 1 percent per year for SJC gold deposits with terms of one, two and three months.

Similarly, Nam A Bank is also mobilising gold with 1-3 month terms, offering an interest rate of 0.8 percent a year.

Meanwhile, many banks have already stopped gold mobilisation, and some others are providing a gold-keeping service, such as DongA Bank. In addition, not so many banks are still issuing certificates of deposit in gold.

Nguyen Thanh Toai, deputy general director of ACB, said the bank had returned a large amount of gold to depositors in late August, so the bank’s gold reserve was affected. Therefore, ACB has increased both gold buying price and gold deposit rate to mobilise more gold to supplement the reserve.

According to a banker, as gold prices pick up while gold deposit rates stay low, people tend to withdraw their gold savings from banks to sell for dong. Moreover, citizens’ confidence in the banking system has been damaged, so they would rather withdraw gold to keep at home.

As such, gold supply of banks is greatly impacted, urging them to seek additional sources, through buying gold from SJC and raising gold deposit rates to weaken withdrawing energy and encourage clients to deposit again.

According to the banker, this is just a temporary fluctuation caused by the sudden gold price hike, and citizens will be calmer when the gold upheaval passes. However, “the central bank should import gold when necessary, so that banks can buy gold and balance their position, avoiding affecting the market, and to avoid affecting foreign reserves, banks will transfer their foreign currencies to the central bank, because the foreign currency sources of the banks in need of gold are still abundant,” said the banker.

Meanwhile, a source told the Daily that the central bank has not considered gold importing yet. The agency is closely following the developments of the market to make timely intervention.