Circular No. 22/2010/TT-NHNN on gold deposit-taking and lending by credit institutions

CIRCULAR

Regulations on Mobilizing and Lending Gold Capital by Credit Institutions

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Pursuant to the Law on the State Bank of Vietnam 1997 and the Law Amending and Supplementing Certain Articles of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Institutions 1997 and the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions 2004;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The State Bank of Vietnam hereby stipulates regulations on mobilizing and lending gold capital by credit institutions for customers as follows:

Article 1. Credit institutions with foreign exchange operation licenses shall mobilize and lend gold capital according to the provisions of this Circular. The type of gold that credit institutions mobilize and lend is gold bars according to the standards of gold trading enterprises which have been granted licenses to produce gold bars by the State Bank of Vietnam.

Article 2. Credit institutions may only mobilize gold capital through issuing securities and lend gold capital for production (manufacturing) and trading of jewelry gold (lending for production and trading of gold bars is not allowed). The mobilization and lending of gold capital shall be implemented in accordance with the State Bank of Vietnam's regulations on domestic issuance of securities by credit institutions, lending by credit institutions to customers, and other relevant legal documents.

Article 3. Credit institutions are not permitted to convert gold mobilized capital into Vietnamese Dong and other monetary forms from the date this Circular takes effect. For the amount of gold capital converted into money according to Clause 2, Article 7 of Decision No. 432/2000/QĐ-NHNN1 dated October 3, 2000 of the Governor of the State Bank of Vietnam on gold capital mobilization and utilization business ensuring value based on gold prices of credit institutions, this converted money amount shall be gradually reduced and fully settled no later than June 30, 2011.

Article 4. Credit institutions shall set interest rates for mobilizing and lending gold capital based on market capital supply and demand, borrowing needs, and the creditworthiness of borrowers, ensuring business efficiency. Publicly announce the interest rates for mobilizing and lending gold capital.

Article 5. Responsibilities of units

1. For credit institutions:

a) Issue specific guidelines on gold mobilization and lending business in accordance with laws on capital mobilization, lending, safety ratios, and other related legal documents, suitable to the business conditions, characteristics, and charter of the credit institution.

b) Send the guidelines on gold mobilization and lending business to the State Bank branch in the province or centrally administered city where the credit institution's headquarters is located and the Banking Inspection and Supervision Authority immediately after the guidelines are issued.

c) Submit reports on gold mobilization and lending according to Appendix 1 of this Circular and provide related information upon request of the State Bank of Vietnam during each period.

2. For State Bank branches in provinces or centrally administered cities:

a) Conduct inspections and examinations of gold mobilization and lending activities of credit institutions within their jurisdiction and handle violations within their authority.

b) Submit reports on the situation of gold capital mobilization and lending by credit institutions according to Appendix 2 of this Circular; report and propose to the Governor of the State Bank to address difficulties and issues regarding gold mobilization and lending by credit institutions.

3. For units at the headquarters of the State Bank of Vietnam: Advise the Governor of the State Bank to implement tasks according to their functions and responsibilities.

Article 6. Implementation

1. This Circular takes effect from the date of signature and replaces the following documents: Decision No. 432/2000/QĐ-NHNN1 dated October 3, 2000 of the Governor of the State Bank of Vietnam on gold and Vietnamese Dong capital mobilization and utilization business ensuring value based on gold prices of credit institutions; Decision No. 1019/2001/QĐ-NHNN dated August 14, 2001 on amending and supplementing Decision No. 432/2000/QĐ-NHNN1 of the Governor of the State Bank of Vietnam.

2. For gold and Vietnamese Dong capital mobilization and lending transactions ensuring value based on gold prices occurring before the effective date of this Circular, credit institutions and customers may continue to implement the agreements they have signed until the end of the contract term.

3. The Director of the Office, Heads of the Monetary Policy Department and Heads of units under the State Bank, Governors of State Bank branches in provinces and centrally administered cities; Chairmen of the Board of Directors and General Managers (Directors) of credit institutions are responsible for implementing this Circular.