Gold market to become more competitive as gold bullion monopoly ends

Gold market to become more competitive as gold bullion monopoly ends

Eligible banks and enterprises will be licensed to import raw gold and produce bullion — a function that, until now, has been exclusively assigned to a single entity.

Eligible banks and enterprises will soon be permitted to import raw gold and produce bullion. (Photo: VNA)

Vietnam’s gold market is poised for significant reform as eligible banks and enterprises will soon be permitted to import raw gold and produce bullion — a move expected to invigorate the sector with increased competition and more brands.

Dao Xuan Tuan, Director of the Foreign Exchange Management Department at the State Bank of Vietnam (SBV), told the Lao dong (Labour) daily that the SBV is in the process of finalising a draft Government decree that amends Decree 24/2012/ND-CP, aimed at gradually liberalising the gold bullion market while ensuring stringent regulatory oversight.

A key proposal in the draft is to allow eligible banks and enterprises to import raw gold and produce bullion — a function that, until now, has been exclusively assigned to a single entity.

The SBV will issue licences to the credit institutions and enterprises meeting requirements to import raw gold to produce bullion, or use the imported material to produce jewellery, Tuan was quoted by the newspaper.

Material import quotas will be granted basing on macroeconomic conditions, the monetary policy, and market fluctuations. This new approach is intended to dismantle the existing monopoly while maintaining the State’s regulatory and supervisory role.

Under the proposed regulations, licensed bullion producers must publicly declare quality standards, maintain detailed transaction records, and integrate their data systems with those of regulatory authorities.

Tuan emphasised that enterprises will be held accountable if product quality does not match the declared standards, adding that data about bullion transactions must be transparent as they are subject to audit at any time.

The permission of multiple bullion brands is hoped to create a more competitive marketplace, narrow price differentials between brands, and ultimately benefit consumers.

To further enhance market transparency and oversight, all payments for bullion transactions will be required to be made via bank accounts and accompanied by electronic invoices — a measure aimed at improving financial tracking and control.

Regarding the jewellery gold sector, Tuan noted that while over 6,000 enterprises are currently active in the production and trading of jewellery gold, most are small-scaled businesses lacking the financial capacity to obtain import licences.

To address this, the draft decree stipulates that only credit institutions and bullion producers eligible to produce gold bullion are licensed to import raw gold. These entities may then supply raw materials to domestic jewellery manufacturers.

This regulation will both increase the supply of raw gold and ensure that import activities remain under control, he noted.

Licensed importers will also be required to establish transparent internal processes, keep full transaction records, and connect their information systems with the relevant authorities to support inspection and monitoring.

The revised decree is expected to represent a turning point for Vietnam’s gold market, laying a stepping stone for a more competitive and transparent market operating in line with market changes and the law.

VIR