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Accordingly, local businesses qualified to trade bullion must have a chartered capital of VND100 billion ($4.7 million) or higher, at least two years’ experience in gold trading activities, annual taxes paid on gold trading of more than VND500 million ($23,800) in the last two years and a gold trading network in at least three centrally-governed provinces or cities.
Head of State Bank’s Foreign Exchange Management Department Nguyen Quang Huy said unqualified bullion traders would have at least six months to make themselves conform with Decree 24 regulations.
Decree 24 got plaudits from economic experts and businesses.
Former head of State Bank’s Foreign Exchange Management Department Phi Dang Minh said a state monopoly in gold management was necessary.
But, gold traders expressed concerns the new decree did not contain clear regulations on account-based gold trading.
“Under Decree 24, account-based gold trading is subject to prime minister’s approval. Restricting physical gold is the right move, but we need to open a channel for non-physical gold trading which will be controlled by the state to abate risk,” said Vietnam Gold Business Association general secretary Dinh Nho Bang.
Le Tham Duong from Ho Chi Minh City University of Banking said the gap in domestic and world market gold prices could not be effectively tackled if the government did not green-light account-based gold trading.
Industry experts said a level playing field was necessary to mobilise idle gold from the community.
A bank executive forecast that 30 banks and five major gold trading firms would be green-lighted to come up with account-based gold trading in foreign markets to minimise risks whereas local people would still be ineligible to perform the service.
Central bank governor once said the State Bank would continue putting a cap on account-based trading in the coming period since this service in fact just entailed profit to a small business group.
Senior economist Le Dang Doanh suggested creating a ‘marketplace’ to promote gold certificate transactions which would be regulated in the upcoming plan to mobilise gold from the community.