Ban on gold deposits to be upheld

Ban on gold deposits to be upheld

The State Bank of Viet Nam has indefinitely extended the deadline for banks to cease accepting gold deposits in a bid to ensure the liquidity of the banking system in the remaining months of the year, State Bank deputy governor Le Minh Hung said on Thursday.

Under Circular No 12, previously issued, commercial banks were to have ceased accepting gold deposits from the public in the form of short-term certificates and pay all gold back to depositors no later than November 25.

However, while banks have bought up around 60 tonnes of gold to date, they were still short of the amount needed to repay depositors by an estimated 20 tonnes, according to State Bank figures.

If the November deadline remained in place, banks would be forced to use available capital to buy up the necessary gold – at the same time that capital demands were surging sharply in the final months of the year ahead of the lunar new year holiday, Hung said.

"This extension will avoid putting pressure on some banks in the system that might face liquidity difficulties in the last months of the year," he said.

Once banks stopped accepting gold deposits, the Government would no longer intervene directly in stabilising the gold market, but would only participate in the market as a trader, he added.

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