State Bank of Vietnam directs to stop gold mobilization

Credit institutions are allowed to continue issuing short-term gold mobilization certificates from now until November 24, 2012, according to the principle that the maturity date of the certificates does not exceed June 30, 2013.

Banks need another two months to be able to buy enough gold.
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The State Bank of Vietnam (SBV) has just issued Document No. 7019/NHNN-QLNH requesting credit institutions with remaining gold mobilization and lending balances to implement a number of contents to terminate gold capital mobilization according to the provisions of Circular 12/2012/TT-NHNN.

Accordingly, in order to promptly end capital mobilization in gold in accordance with the provisions of Circular 12 and ensure gold liquidity safety for credit institutions, the State Bank of Vietnam allows credit institutions that are mobilizing and have remaining gold loan balances to continue issuing short-term gold mobilization certificates from now until November 24, 2012.

This issuance must ensure that the maturity date of newly issued short-term gold certificates does not exceed June 30, 2013. Newly issued certificates cannot be paid before maturity.

At the same time, credit institutions are only allowed to issue additional short-term mobilization certificates when the amount of gold in the treasury and debt collection is not enough to pay, the total maximum mobilization volume does not exceed the total volume of gold used (except for the conversion of gold into money according to Circular 32/2011/TT-NHNN and the sale of gold for a term) and according to the principle of the total volume of mobilized gold decreasing gradually.

Credit institutions must develop and report to the State Bank a plan to issue short-term gold mobilization certificates (mobilization term, expected mobilization volume of each term) from now until November 25, 2012 according to the above principles for the State Bank to review and approve for each credit institution before implementation.

In addition, credit institutions must develop a plan to recover the volume of gold converted into money and use it for other purposes, except for gold loans, and send it to the State Bank by October 31, 2012.

According to Circular 12 of the State Bank of Vietnam, from November 25, commercial banks must stop gold-related transactions. The State Bank of Vietnam has recorded that in the past 6 months, credit institutions have purchased more than 60 tons of gold to settle contracts, and currently there is a shortage of about 20 tons.

With the buying speed as in the past, banks need 2 more months to be able to buy enough gold. According to Deputy Governor of the State Bank of Vietnam Le Minh Hung, in the fourth quarter of each year, capital demand for the economy increases, if banks have to focus on buying gold, it will threaten the safety of the system.

According to (Chinhphu.vn) - LT