SBV Requires Credit Institutions To Terminate Gold Mobilising And Lending In Accordance With Circular 12/2012/TT-NHNN
The State Bank of Vietnam (SBV) issued Document No. 3854/NHNN-QLNH on June 25 to require credit institutions to terminate gold mobilising and lending.
Accordingly, SBV requires credit institutions to strictly comply with Circular No.12/2012/TT-NHNN and Directive No. 05/CT-NHNN. Credit institutions are allowed only to issue short – term gold-denominated certificates in order to make gold repayment at the request of customers in case where the amount of gold loan collection and gold inventory are not sufficient to make repayment. The issuance of short-term gold-denominated certificates by credit institutions should be terminated by November 25, 2012.
Credit institutions should make reports in advance to SBV (the Foreign Exchange Management Department) in regard to the need of the issuance of gold-denominated certificates. In these reports, the requirement and purpose of issuance, and the roadmap for reducing short-term gold-denominated certificate mobilising interest rates to a reasonable level in order to reduce the amount of gold mobilisation should be clarified.
In case where SBV detects violations of the regulations related to gold mobilising and lending by credit institutions, the Financial Supervision Agency and SBV municipal and provincial branches will immediately undertake supervision.
The compliance with the regulations on termination of gold mobilising and lending in accordance with Circular No.12/2012/TT-NHNN by credit institutions is one of the conditions for SBV to grant gold bar trading licenses to credit institutions.