The majority of companies applying for gold bar trading are eligible to do the job, according to Nguyen Hoang Minh, deputy director of the HCMC Branch of State Bank of Vietnam (SBV) in charge of inspecting the corporate candidates.
As per Decree 24/2012/ND-CP, enterprises wanting to trade gold bars are required to have charted capital of at least VND100 billion and at least two years’ gold trading experience. Besides, they are required to have tax payments of at least VND500 million from gold trading annually for two consecutive years and have branch networks in at least three centrally-governed provinces and cities.
As for credit institutions, SBV will consider granting business licenses for gold bar trading if they meet three conditions on charted capital of at least VND3 trillion, having registered for gold trading and having trading networks in at least five centrally-governed provinces and cities.
According to Minh, his agency so far has inspected a large number of banks and companies asking for permission to act as gold bar traders, most of them satisfy the required conditions. The central bank will complete the issuance of licenses to qualified firms this month.
The regulation on certain enterprises allowed for trading gold bars is one of the steps of the central bank to make it easier for it to manage the local gold market. At the same time, the monetary authority also targets to ease the high pressure of public gold holdings given the limited number of gold selling points compared to previous times. However, the move along with the new law banning commercial banks from gold mobilization and gold lending are yet to be effective as expected.
Nguyen Cong Tuong, deputy sales manager of Saigon Jewelry Company (SJC), said local people over the past few days had rushed to buy gold instead of selling the yellow metal. And SJC has had to manage to seek supply to meeting rising buying demand.
This is also the reason why local gold prices in the last two days were up to more than VND4.1 million per tael higher than global prices, the highest gap recorded so far.
The proposal for temporary gold export and re-import from local lenders has yet to receive the central bank’s official approval. Tuong said the solution if allowed will directly help local banks replenish their gold supply to repay gold depositors, meaning the gold will not be sold out.
On the other hand, the solution will indirectly reduce purchasing pressure for the market as members in the banking industry will not have to buy gold to repay their customers.
Reprocessing gold bars into products meeting SJC standards is still being done at a slow pace. After nearly three months carrying out the process, some 175,000 taels have been reprocessed, with about 270,000 taels set to be reprocessed in the coming time.
SJC has imported one more inspection machine to speed up gold reprocessing but the machine has yet to arrive at the firm.
SJC bought one tael of gold at VND46.6 million and sold it at VND46.75 million on Thursday, up VND130,000 a tael against the previous day. Gold prices since the month’s beginning have only gone down VND370,000 or 1.25% a tael at home while global prices have shrunk by 2.15% in the same period.
The Saigon Times Daily