Commercial banks try to attract overseas remittance

People will have their foreign currencies temporarily seized if they sell money to gold shops, the State Bank of Vietnam has warned.

The demand for selling and purchasing foreign currencies is increasing in the kieu hoi (overseas remittance) season.

People don’t want to sell kieu hoi to banks, why?

Overseas remittance service companies all say that people who receive kieu hoi from their overseas Vietnamese relatives want to receive money in foreign currencies instead of VND.

General director of Sacombank Tran Xuan Huy said that despite a lot of measures to encourage people to sell kieu hoi to the bank or deposit the money, the bank could only purchase 10 percent of the $850 million worth. People instead prefer to receive money in foreign currencies and then sell the currencies at gold shops when they need VND.

Huy said that if just half of the sum of kieu hoi went back to banks, banks would not lack foreign currencies to sell to enterprises.

Saigon Bank recently launched a programme, under which the bank gives a “lucky two dollar bank note’” for every 200 dollar that kieu hoi receivers sell their money to the bank. It also offered bonus interest ratea to those, who deposit kieu hoi at the bank. However, the programme has not attracted many clients

People do not want to sell foreign currencies to banks simply because the prices at which banks purchase are much lower (some thousands of dong per dollar) than the prices quoted by gold shops.

SBV: stop selling foreign currencies to gold shops

Under the current laws, Vietnamese people have the right to keep foreign currencies. However, they can only sell foreign currencies at institutions licensed to trade foreign currencies. Besides bank branches and transaction offices, there are 83 foreign currency exchange points in HCM City eligible for serving people’s purchase and sale demands.

According to Nguyen Hoang Minh, deputy director of the State Bank of Vietnam, most gold shops are not licenses to trade foreign currencies. Therefore, the State Bank has threatened to heavily punish violators. If people are discovered selling dollars to unlicensed gold shops, they will have their money temporarily seized and then be forced to sell it later to banks

Nine violation cases have been discovered in HCM City so far, where management agencies imposed fines of 57.5 million dong on each.

Minh said that competent agencies will continue taking inspection tours to tighten the market.

However, analysts have warned that inspection tours will only make the black market quiet for a short time before it becomes bustling again later.

VietNamNet/TT

Tags: Vietnam banking, Vietnam finance news