Proposal that enterprises with capital of 500 billion VND can also produce gold bars

The Vietnam Gold Business Association warned that if the overly strict regulations in the draft amendment to Decree 24 are maintained, the gold bar production market will continue to be constrained, uncompetitive and difficult to break the monopoly that has lasted for more than a decade.

The Vietnam Gold Trading Association (VGTA) recently issued a document providing comments on the draft amendments and supplements to Decree 24 on gold market management. One of the notable contents is the recommendation that credit institutions, especially commercial banks, should not be allowed to participate in the production and trading of gold bars.

Explaining this point of view, VGTA said that according to the Law on Credit Institutions (amended on January 18, 2024), gold production activities are not within the functions of commercial banks.

The core function of the banking sector is to trade in currency, especially to provide credit and payment services. Expanding into the gold production sector will require banks to use a large amount of capital to invest in factories, equipment, and human resources, factors that are outside of their core tasks, while also dispersing credit resources that should be focused on supporting production and business enterprises.

The association also cited the reality of the period before 2012, when a number of commercial banks participated in the production and trading of gold bars, leaving behind many long-lasting consequences. It was only thanks to the drastic intervention of the State Bank that the market gradually stabilized again.

The gold bar production market will continue to be narrow, uncompetitive and difficult to break the monopoly that has lasted for more than a decade.

In addition, VGTA also commented on the conditions for granting licenses to produce gold bars. Specifically, the draft requires enterprises to have a minimum charter capital of VND1,000 billion, which, according to the Association, is too high, leading to only 1-3 enterprises being able to meet the requirement, further constricting the market and maintaining the monopoly of gold bars.

From there, the Association proposed lowering the required charter capital to VND500 billion, while emphasizing the need to evaluate the overall capacity of the enterprise, including business efficiency, brand reputation, product design and quality, as well as the level of compliance with legal regulations.

Regarding the regulation on granting limits and licenses for each import and export of gold bars and raw gold, VGTA proposed to remove this regulation because it creates additional administrative barriers, slows down the response of businesses to fluctuations in the world gold market and affects business efficiency and the regeneration of foreign currency sources.

Instead, the Association proposes that the State Bank should only set an overall annual limit and allocate it to each enterprise from the first quarter on the principle of publicity and transparency. On that basis, enterprises can proactively choose the time and volume of import and export within the allocated limit. Enterprises will make periodic reports and the adjustment of the limit (if any) will be considered and decided by the State Bank.

Finally, VGTA recommends that the Drafting Committee should encourage the import of raw gold to produce gold bars and jewelry for the domestic and export markets, instead of promoting the import and export of gold bars of a purely commercial nature.

Source: https://baodaknong.vn/kien-nghi-doanh-nghiep-von-500-ty-dong-cung-duoc-san-xuat-vang-mieng-256151.html