Circular No. 11/2011/TT-NHNN of April 29, 2011 providing for termination of gold deposit mobilization and gold lending of the credit institutions

CIRCULAR

PROVIDING FOR THE TERMINATION OF MOBILIZATION AND PROVISION OF LOANS IN GOLD BY CREDIT INSTITUTIONS

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

– Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated 16 June 2010;

– Pursuant to the Decree No. 96/2008/ND-CP dated 26 August 2008 of the Government providing for the functions, duties, authorities and organizational structure of the State Bank of Vietnam;

– Implementing the Resolution No. 11/NQ-CP dated 24 February 2011 of the Government on main solutions focusing on restriction of inflation, stabilizing macro-economy, ensuring social security;

The State Bank of Vietnam hereby provides for the termination of mobilization and provision of loans in gold by credit institutions, foreign bank’s branches (hereinafter shortly referred to as credit institutions) as follows:

Article 1. Credit institutions shall not be authorized to provide loans in gold to customers and other credit institutions (including any credit contract that has already been signed but not disbursed yet or not fully disbursed yet); not to deposit gold at other credit institutions; not to perform entrustment, investment operations and other forms of credit extension in gold.

Article 2. Credit institutions shall not be authorized to mobilize capital in gold, except for the case of issuing short term certificates in gold for gold payment upon request of the customers in the event where the amount of debt collection in gold and cash in vault is not sufficient for making payment. The issuance of short term certificates in gold by credit institutions shall be terminated on 01 May 2012.

Article 3. Credit institutions shall not be authorized to convert their fund previously mobilized in gold to Vietnamese dong and other forms in cash. For the fund in gold that has already been converted to cash, it shall be subject to final settlement on 30 June 2011 at the latest.

Article 4. Responsibilities of institutions

1. For credit institutions: To send report on the mobilization and provision of loans in gold in line with Appendix 01, Appendix 02, Appendix 03 and Appendix 04 of this Circular; to supply related information upon request by the State Bank of Vietnam from time to time.

2. For State Bank’s branches in provinces, cities under the central Government’s management:

a. To inspect, examine the termination of mobilization and provision of loans in gold by credit institutions in the local area, to deal with acts of violation within the scope of competence.

b. To send report on the situation of mobilization and provision of loans in gold by credit institutions in line with Appendix 05 of this Circular; to report and propose the Governor of the State Bank to handle any difficulties, queries relating to the termination of mobilization and provision of loans in gold by credit institutions in the local area.

3. For the Banking Inspection and Supervision Department: To supervise, inspect, examine the termination of mobilization and provision of loans in gold by credit institutions in accordance with provisions of this Circular; to deal with cases of violation within the scope of competence; to report and propose the Governor of the State Bank to handle any difficulties, queries relating to the termination of mobilization and provision of loans in gold by credit institutions.

Article 5. Implementation organization

1. This Circular shall be effective from 01 May 2011.

2. The Circular No. 22/2010/TT-NHNN dated 29 October 2010 of the Governor of the State Bank providing for the mobilization and provision of loans in gold by credit institutions shall expire.

3. The Director of the Administrative Department, Director of the Monetary Policy Department and Heads of units of the State Bank of Vietnam; Managers of the State Bank’s branches in provinces and cities under the central Government’s management; Chairman of Board of Directors and General Directors (Directors) of credit institutions, and related organizations, individuals shall be responsible for the implementation of this Circular.