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The Vietnam Gold Business Association recently sent a dispatch to provide comments on the Draft Amendment and Supplement to Decree 24 on Gold Market Management (Decree 24).
Notably, the Association has proposed not to add credit institutions, especially commercial banks, to participate in the production and trading of gold bars.
Explaining this, VGTA said that according to the Law on Credit Institutions dated January 18, 2024, commercial banks do not have the function of producing gold. The main tasks of commercial banks are currency trading (especially credit activities) and providing payment services.
"If commercial banks are allowed to participate in the production and trading of gold bars, they will be forced to use a large amount of capital to invest in factories, machinery, and training of workers, and invest in areas that are not within their main functions and tasks of providing credit and capital support to production and business enterprises to achieve economic growth targets," the Association said.
Besides, commercial banks are not specialized organizations in gold production and trading, and history has proven that commercial banks were ineffective in producing and trading gold bars before 2012.
"Some commercial banks have left behind long-lasting, unexpected consequences that have been stabilized thanks to the effective and determined direction of the State Bank," VGTA emphasized.
In addition, the Vietnam Gold Business Association also commented on regulations on conditions for granting licenses to produce gold bars for enterprises with charter capital of VND1,000 billion or more.
The association believes that this regulation is too strict, only 1 to 3 gold production and trading enterprises can meet this condition.
With the above regulation, the number of enterprises participating in gold bar production is insignificant, making it difficult for the market to expand and there is a risk that the State will continue to hold a monopoly, reducing diversity and limiting the supply of gold bars.
For the above reasons, the Association recommends that a charter capital of VND500 billion or more is appropriate. In addition, it is necessary to focus on the production capacity of the enterprise, business efficiency, business reputation, brand in the market, design and quality of gold bars; and compliance with state regulations related to gold trading.
Regarding the annual quota and license for each export, import of gold bars and import of raw gold for gold bar manufacturing enterprises in the draft, the Association believes that it should be considered to be removed.
Because this regulation increases sub-licenses, increases administrative procedures for businesses, hinders gold bar export activities, and regenerates foreign currency for the country. At the same time, it loses production and business opportunities for businesses because the world gold market fluctuates continuously and is affected by many factors.
If businesses wait for each licensing procedure, they will lose the opportunity to export or import at the best price, affecting production efficiency and export activities.
The Association also proposed that the State Bank only issue annual quotas for gold bar import and export and raw gold import, allocated to each enterprise from the first quarter of the year according to the principles of publicity, transparency, and no sub-licenses.
On that basis, enterprises proactively choose the time and volume (within the limit) to import or export to achieve the highest efficiency. Enterprises periodically report on the implementation of the gold import and export limit to the State Bank. The State Bank will consider and decide on any adjustment or addition to the limit.
In addition, the Drafting Committee is requested to consider the mechanism to encourage the import of raw gold to produce gold bars and jewelry to meet domestic market demand and serve export and foreign currency regeneration, and should not create a mechanism for commercial activities (import and export of gold bars).
Source: https://baodautu.vn/de-nghi-cho-phep-doanh-nghiep-von-dieu-le-tu-500-ty-dong-duoc-san-xuat-vang-mieng-d308766.html
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