Banks are not allowed to lend money for the purchase of gold.

• October 9, 2011 17:27

To ensure the stability of the domestic gold market, on October 8th, the State Bank of Vietnam issued another new regulation.

Specifically, according to this new Circular, credit institutions are not allowed to lend for the purpose of purchasing gold, except in cases where the Governor approves loans for the purchase of gold for the production of gold bars, the production and processing of gold jewelry and handicrafts, and loans for the import of raw gold materials under license.

This circular also states that the State Bank of Vietnam stipulates a risk weighting of up to 250% for loans secured by gold.

The Circular takes effect from October 10, 2011. For credit contracts signed before October 10, credit institutions and borrowers shall continue to implement the signed agreements until the principal and interest are fully repaid.

According to the State Bank of Vietnam, the issuance of the aforementioned Circular aims to further control lending activities for gold purchases and loans secured by gold, contributing to the stability of the gold and foreign exchange markets.

According to Vietnam+