Thông tư 32/2011/TT-NHNN

CIRCULAR

AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE STATE BANK OF VIETNAM’S CIRCULAR NO. 11/2011/TT-NHNN OF APRIL 29, 2011, ON TERMINATION OF MOBILIZATION OF DEPOSITS AND PROVISION OF LOANS IN GOLD BY CREDIT INSTITUTIONS

Pursuant to June 16, 2010 Law No. 46/2010/QH12 on the State Bank of Vietnam;

Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions; Pursuant to the Government’s Decree No. 160/2006/ND-CP of December 28, 2006, detailing the Ordinance on Foreign Exchange;

Pursuant to the Government’s Decree No. 96/2008/ND-CP of August 26, 2008, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

In furtherance of the Prime Minister’s instructions in Document No.1006/VPCP-KTTH of September 8, 2011;

The State Bank of Vietnam (below referred to as the State Bank) amends and supplements a number of articles of Circular No. 11/2011/TT-NHNN of April 29, 2011, on termination of mobilization of deposits and provision of loans in gold by credit institutions (below referred to as Circular No.11/2011/TT-NHNN) as follows:

Article 1. To amend and supplement a number of articles of Circular No.11/2011/TT-NHNN as follows:

1. To amend and supplement Article 3 as follows: “Article 3.

1. Except the case specified in Clause 2 of this Article, credit institutions are not allowed to convert previously mobilized deposits in gold into Vietnam dong and other monetary forms.

2. Based on the gold market situation, the State Bank will consider allowing commercial banks fully meeting the conditions specified in Clause 3 of this Article to convert mobilized and currently kept gold amounts (below referred to as untraded gold amounts) into cash and open overseas gold accounts to offset gold-price fluctuation risks. Untraded gold amount equals mobilized and currently kept gold amount minus (-) gold amount lent to or deposited at other commercial banks and gold amount used for other purposes.

Based on the gold market situation, the State Bank will decide on the number of commercial banks that are allowed to convert untraded gold amounts into cash and open overseas gold accounts.

3. Commercial banks may be considered and allowed by the State Bank to convert untraded gold amounts into cash and open overseas gold accounts when fully meeting the following conditions:

a/ Having conducted gold trading, mobilization or lending for five years or more.

b/ Having an effective internal control system; having issued regulations on risk management in gold trading.

c/ Operating mainly in centrally run cities.

d/ Committing no violation of regulations on gold trading management.

4. Commercial banks wishing to convert untraded gold amounts into cash and open overseas gold accounts must send 1 (one) dossier directly or by post to the State Bank (the Foreign Exchange Management Department), such a dossier comprises:

a/ An application for converting untraded gold amounts into cash and opening overseas gold accounts, (made according to the form provided in Appendix 1 to this Circular - not printed herein);

b/ A plan on conversion of untraded gold amounts into cash and opening of overseas gold accounts to offset gold-price fluctuation risks, containing at least description of experience on gold trading, process of converting untraded gold amounts into cash and conducting transactions on overseas gold accounts, and the system of risk supervision in the process of converting untraded gold amounts into cash and opening overseas gold accounts;

c/ A report on gold trading and gold import in the last 6 months and untraded gold amounts at the time of application (made according to the form provided in Appendix 2 to this Circular - not printed herein).

5. Within 3 (three) working days after receiving a valid and complete dossier of application for converting untraded gold amounts into cash and opening overseas gold accounts, the State Bank shall issue a written permission or a written notice of refusal. A written permission must specify the quantity of untraded gold amounts allowed to be converted.

6. The conversion of untraded gold amounts into cash and opening of overseas gold accounts by commercial banks shall be conducted as follows:

a/ Commercial banks may convert a maximum 40 % of their untraded gold amounts into cash at the time of submitting the application dossier.

b/ Commercial banks may purchase material gold on the domestic market to make up for converted gold amounts in accordance with written permissions of the State Bank. In case commercial banks meet difficulties in purchasing material gold to make up for converted gold amounts on the domestic market, the State Bank will consider permitting gold import to make up for converted gold amounts.

c/ A commercial bank may open at most 2 (two) overseas gold accounts. Commercial banks shall register their accounts with the State Bank and reach agreement with foreign partners so that the latter will send statements of daily transactions on their accounts to the State Bank (the Foreign Exchange Management Department).

d/ Commercial banks may purchase gold on their overseas accounts only after converting into cash untraded gold amounts not exceeding gold amounts converted domestically.

e/ Commercial banks may sell gold on their overseas accounts only after domestically purchasing material gold or importing gold under permission of the State Bank to make up for converted gold amounts and of amounts not exceeding the material gold amounts domestically purchased or imported.

f/ Commercial banks shall balance the position of untraded gold amounts with that of gold amounts on their overseas accounts at 7 a.m everyday (except Sundays and public holidays);

g/ Commercial banks may not keep the short position of 2 (two) overseas gold accounts.

h/ Based on the gold market situation and difference between domestic and international gold price, the State Bank will require commercial banks to stop converting untraded gold amounts into cash and close overseas gold accounts. Upon receiving the notice of the State Bank, commercial banks shall stop converting untraded gold amounts into cash and close overseas gold accounts within 2 (two) working days.

7. Responsibilities of commercial banks converting untraded gold amounts into cash and opening overseas gold trading accounts:

a/ To be accountable for efficiency and safety of the conversion of untraded gold amounts into cash and trading in gold on their overseas accounts.

b/ To observe regulations on management of foreign exchange and gold trading and this Circular.

c/ To submit daily written reports on converted and domestically purchased gold amounts and transactions on overseas gold accounts from 7:00 hours of the previous day to the reporting day (made according to a form provided in Appendix 3 to this Circular - not printed herein) to the State Bank (the Foreign Exchange Management Department and the Monetary Policy Department).

d/ To send statements of daily transactions on their overseas gold accounts to the State Bank (the Foreign Exchange Management Department) and be responsible for the accuracy of these statements.

e/ To report in writing to the State Bank immediately after converting 40% of untraded gold amounts and upon occurrence of changes in their overseas gold accounts.”

2. To amend and supplement Article 4 as follows:

a/ To supplement Clause 2, Article 4 as follows:

“c/ To inspect and examine gold trading on the domestic market and on overseas gold accounts by commercial banks in their localities, and handle violations according to their competence”.

b/ To amend Clause 3, Article 4 as follows:

“The Banking Inspection and Supervision Agency shall supervise, inspect and examine the termination of the mobilization of deposits and provision of loans in gold, conversion of untraded gold amounts into cash, purchase of gold on the domestic market and conduct of transactions on overseas gold accounts of commercial banks under this Circular; handle violations according to its competence; and report on and propose the State Bank Governor to settle arising difficulties and problems”.

c/ To supplement Article 4 as follows:

“4. The Foreign Exchange Management Department shall examine and submit to the State Bank Governor dossiers of application for permission for converting untraded gold amounts into cash and opening overseas gold accounts of commercial banks; monitor the gold market, follow and make sum-up reports on conversion of untraded gold amounts into cash, purchase of gold to make up for converted gold amounts and conduct of transactions on overseas gold accounts of commercial banks when commercial banks are allowed by the State Bank to convert untraded gold amounts into cash and open overseas gold accounts so as to advise the State Bank Governor on plans on implementation or handling.

5. The Monetary Policy Department shall monitor the use of untraded gold amounts of commercial banks.”

Article 2. Implementation provisions

1. This Circular takes effect on October 6, 2011.

2. The Chief of the Office, the Chief Banking Inspector, the director of the Monetary Policy Department, the director of the Foreign Exchange Management Department, heads of units of the State Bank, directors of State Bank provincial-level branches, chairpersons of boards of directors or members’ councils, directors general of commercial banks and related organizations shall implement this Circular.-