In particular, this association recommends not to add credit institutions, especially commercial banks, to participate in the production and trading of gold bars.
Explaining this, the Association 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, commercial banks 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 trading enterprises to achieve economic growth targets ," the Vietnam Gold Trading Association emphasized.
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-term unintended consequences, but thanks to the effective and determined direction of the State Bank, they have been stabilized.
Another issue that the association also believes needs to be reconsidered is the State Bank's organization of gold bar production in each period. Because the State Bank is the state management agency for gold trading activities, not the agency that produces and trades gold bars.
" If the State Bank participates in the market (organizing the production of gold bars), which agency will it be under the management of? And it will lead to overlapping tasks of both doing business and performing State management ," the Association raised the issue.
According to the Association, if the State Bank participates in the production and supply of gold bars, it will certainly create a psychological impact to attract people and investors to continue investing in gold bars bearing the State Bank brand, which can easily lead to the same consequences as before when SJC gold was used as the national gold standard.
Thus, the gold bars of the enterprise will not be able to attract, so the goal of diversifying the supply of gold bars with many different brands to pull down the gold price is difficult to achieve.
When market demand continues to focus on the State Bank's gold bar brand, it will put pressure on the State Bank to produce gold bars, pushing up demand, causing the price of gold bars to increase, distorting the gold bar market.
Regarding the regulations on conditions for granting a license to produce gold bars for enterprises with charter capital of 1,000 billion VND 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, easily forming a monopoly for the state to produce and supply gold bars, limiting the supply of gold bars.
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 issuance of annual quotas and licenses 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 shall consider and decide on the adjustment of the limit. In addition, it is recommended that the Drafting Committee 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://baolangson.vn/de-xuat-khong-bo-sung-ngan-hang-thuong-mai-tham-gia-san-xuat-vang-mieng-5050567.html
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