VietNamNet Bridge – People have complained that they have nowhere to deposit gold. Banks have said they are meeting a trouble that they still cannot collect debts because the loans have yet come matured, while they have to stop mobilizing gold deposits by June 30, 2013.
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Thuy, an office worker in HCM City, felt lucky that the gold rings she put in
the wardrobe were not stolen by the burglars intruding into her house last week.
However, she feels worried about the assets, because she now has nowhere to keep
gold.
Commercial banks now refuse gold deposits. And when Thuy came to a bank
transaction office near her house to ask for gold keeping services, she was told
that she needs to come to a big branch.
Several tons of gold deposits have yet to be taken back
Do Minh Toan, General Director of ACB, said banks have been told to gradually
reduce the outstanding loans in gold by June 2013. However, ACB still cannot ask
for debt payment right now, because the credit contracts signed before were all
long term, 5-10 year contracts. Toan said that it will take 3.5-4 years more to
clear all the outstanding loans in gold.
Since the central bank has set up the deadline in June 2013, banks would have to
convert the gold outstanding loans into VND outstanding loans. If not, banks
would have to use their dong to buy gold for lending.
Also according to Toan, ACB’s outstanding loans in gold remain high, about
100,000 taels.
Other bankers have shared the same worry with Toan. General Director of Dong A
Bank Tran Phuong Binh, said banks may have to negotiate with clients to convert
the current gold outstanding loans to Vietnam dong. However, it would be not an
easy task.
Binh explained that the gold credit contracts would only become due in some more
years. Meanwhile, clients would have to suffer, because the dong interest rates
would be higher than the gold interest rates. Especially, the gold prices are
now much lower than the prices at the moments when they borrowed from banks.
In this case, banks would have to think of the solutions to minimize the losses
for clients by offering lower lending interest rates, or selling gold at
preferential prices to the clients who agree to convert gold outstanding loans
into dong.
But what will happen, if clients don’t agree to convert gold loans into
VND loans?
According to Nguyen Dinh Tung, General Director of OCB, since banks cannot
mobilize deposits in gold, banks would have to use their Vietnam dong to buy the
amounts of gold equal to the gold outstanding loans. If so, banks would have to
suffer loss, because the VND interest rate is now at 8 percent per annum, while
gold lending interest rate just three percent.
Besides, they would also face the high risk of the gold price fluctuations.
Truong Van Phuoc, General Director of Eximbank, also said on Tuoi tre that banks
committed before to lend gold to clients for 10-15 years, and it is impossible
to force people to pay gold back right now.
Phuoc said that Eximbank’s gold outstanding loans remain high, about one ton, or
26,000 taels.
Meanwhile, the newspaper has quoted Nguyen Quang Huy, Director of the Foreign
Currency Management Department under the State Bank of Vietnam, that the central
bank is considering the measures to ensure the gold payment to gold depositors.
As for the gold borrowers, the central bank would not force credit institutions
to take back the gold they lent. The central bank said it respects the principle
of non-retroactive effect of legal documents.
Compiled by Kim Chi