Stricter gold business management regulations in Decree 24 have created diverse sentiments among businesses.
Under Decree 24/2012/ND-CP which became effective from late May 2012, businesses not coming up to par with conditions on gold bar business provision regulated in Decree 24 shall stop granting the service from the end of next month.
Industry insiders assumed that few of the 12,000 on-going gold bar trading units across the country could meet Decree 24’s stringent requirements.
“Of 21 proposals for gold bar trading licenses from Ho Chi Minh City-based businesses, 19 were found to be up to scratch including eight banks and 11 business entities. Relevant records of these units were forwarded to the State Bank,” said State Bank of Vietnam (SBV) Ho Chi Minh City branch office deputy director Nguyen Hoang Minh.
Minh acknowledged it would be hard to avert illicit gold bar trading at small gold shops, adding that private jewel outlets should return to traditional business of processing and trading in personal adornments.
Scores of gold firms not satisfying Decree 24’s requirements had reportedly come to the planning and investment departments asking for conversion of their business licences from gold trading into gems trading.
Jewel expert Huynh Trung Khang assumed the State Bank’s gold bar business restriction was to revive order in the bullion market, but it would not work effectively in the long-term.
“Under Decree 24, PNJ no longer engaged in making gold bars under PNJ brand but our company still got the nod for SJC gold bar retailing and wholesaling. Hence, PNJ will scale up trading of SJC gold bars in the coming period,” said Phu Nhuan Jewelry Joint Stock Company (PNJ) general director Cao Thi Ngoc Dung.
According to Doji Gold & Gems Group chairman Do Minh Phu, since Doji was one of a few businesses licenced to make and trade in gold bars, it would help TienPhong Bank turn the service into a spearhead business area with rosy prospect.
Doji Group is TienPhong Bank’s strategic partner holding the bank’s 20 per cent stake.
“Tien Phong Bank is sourcing a SBV licence to embrace gold business and take part in stabilising the bullion market. The customers could shortly buy gold bars at Tien Phong Bank transaction offices,” said Phu.
To be licenced in gold bar business, business entities must satisfy the following conditions:
To businesses, having at least VND100 billion ($4.8 million) in chartered capital, experiences in gold business at least two years, paying taxes from VND500 million ($23,800) per year from gold business in two most recent years and operating sales agents and branch office network in at least three centrally-governed localities.
To credit organisations, having at least VND3 trillion ($143 million) in chartered capital, registered gold business operation, having branch office network in at least five localities.