State bank tightens control over trade of gold bars
State bank tightens control over trade of gold bars
Transactions of gold bars valued at VND300 million or more must be reported to the State Bank of Viet Nam (SBV) from June 30 this year.
According to a new Government directive relating to the Law on Anti-Money Laundering, credit institutions and businesses licensed to trade gold bars will be required to report to the central bank for these high-value transactions in a bid to create more transparency.
They must also demand customer identification when buying or selling bullion valued at VND300 million (7 taels) or more and fully evaluate high risk transactions before sanctioning them.
To better manage the gold market, SBV deputy governor Le Minh Hung said that firms and banks with licences to trade gold bars would be regularly checked to ensure they were following SBV regulations, and warned that any violators would face strict fines.
In another move this week, the Viet Nam Gold Business Association proposed that the central bank provides loans to enterprises so that they can purchase gold at SBV gold bar auctions.
Personal approval
According to the current regulations, credit institutions are not allowed to give their clients loans to buy gold, unless the SBV Governor personally approves such a move in the case of jewelers looking to process and produce jewelry.
The association has said that the auctions are currently biased towards banks, as the SBV demands that the minimum gold volume to bid for is 1,000 taels (roughly VND40 billion), too high an amount for businesses without abundant working capital.
They claimed that this unfair competition has damaged many small and medium-d gold enterprises, despite the Government pledging to help these businesses overcome the current economic difficulties through the introduction of preferential credit packages.
"Many gold trading enterprises have extensive networks across the country, with deep knowledge and long experience in the industry. They can help increase gold supply for the domestic market, satisfying the primary goal of the Government and the SBV," they said in a statement.
Yesterday, the SBV sold 25,700 taels of gold bars from a stockpile of 26,000 taels in its 13th auction of the year. The highest price offered was VND42.42 million per tael and the lowest price was VND42.37 million. Eight banks and firms have bought the gold, ranging from amounts of 1,500 to 10,000 taels. So far in 2013, the SBV has sold 366,400 taels (amounting to 14 tonnes). They are scheduled to hold another three gold bar auctions next week.
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