According to the second quarter 2019 financial statements of commercial banks, as of June 30th, four banks in HCM City recorded outstanding loans in gold.
Specifically, Asia Commercial Joint Stock Bank (ACB) had 140 billion dong of gold loans (equivalent to 3,615 taels). In the bank’s asset item, gold reserves were 382 billion dong (9.864 taels). The other asset items in the form of gold were nearly three billion dong (77.4 taels).
Meanwhile, the outstanding loans in gold of Export Import Commercial Joint Stock Bank (Eximbank) were 29.4 billion dong (759 taels). Eximbank also had a cash item in the form of gold worth 407 billion dong (10,510 taels).
Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)’s outstanding loans in gold were 418 billion dong (10,871 taels). The bank also had an asset item in the form of gold valued at up to 901 billion dong (23,710 taels). In addition, Sacombank also had 39 billion dong (1,014 taels) of customer deposits in gold.
Saigon Commercial Joint Stock Bank (SCB) also recorded an outstanding gold loans of 7.6 billion dong (196 taels). However, the bank is having an asset reserve in gold worth 62.3 billion dong (1,608 taels).
Although some banks no longer have outstanding loans in gold, they still have gold reserve assets, including Vietnam Prosperity Commercial Joint Stock Bank (VPBank) with 185.4 billion dong (4,787 taels); HCM City Development Commercial Joint Stock Bank with 16 billion dong (413 taels); Tien Phong Commercial Joint Stock Bank (TPBank) with 789 billion dong (20.372 taels), particularly the “other debts” item in the form of gold worth 8.5 billion dong (219 taels).
Previously, the government issued Decree 24 on gold trading activities. Along with Circular 11 and 12 of the State Bank of Vietnam (SBV), all gold lending activities ended on May 1st 2011 and gold mobilisation activities ended on November 25th 2012.
At the same time, Decree 24 with strict prohibition of the use of gold as a means of payment and sanctions to handle the use of gold as a means of payment in Decree 95, etc. have completely overcome the inadequacies of the gold market.
Implementing the above policies, as of May 2013, credit institutions settled over 80 percent of the outstanding gold mobilisation.
More than seven years have passed, commercial banks no longer perform gold-related activities, but banks still hold gold for people because gold is considered an asset. According to representative of the SBV HCM City branch, banks in the area are holding 30,000 taels of gold for people.
The purpose of ending the role of being a currency and payment function of gold is that it is impossible to have three currencies with the same payment function, including VND, USD and gold. The government’s view is that in Vietnam, the main currency for payment is gold.
From the perspective of a management body, the SBV affirmed to ensure the legal rights to store gold assets of people and have specific regulations to ensure that people’s gold purchase is legal, profitable and benefits the development of the economy.
