Local banks stop lending gold, eyeing sbv’s guide

Many local lenders on May 4 stopped lending gold to eye the State Bank of Vietnam (SBV)’s guide, the local newswire Tuoi Tre reported.

The banks also freeze gold-lending contracts that were signed earlier but not yet disbursed, local media added.

Nguyen Huu Dang, Housing Development Bank HCMC’s general director said the bank has no idea to settle loans with maturity of 5-10 years which’s have been disbursed for only 3-4 years. The unlisted lender is now awaiting specific guide from the central bank.

General Director of a big bank said it will persuade long-term gold borrowers to switch to dong loans, yet concerning that the solution may not work due to “very high” dong lending interest rates.

The central bank on April 22 asked commercial banks to cease lending gold from May 1 and stop accepting gold deposits two years from now as it takes time for them to collect loans and raising gold deposits is to ensure gold liquidity, a banker said.

As of May 4, many lenders still attract gold deposits through issuing short-term god CDs. Local banks are stepping up to cut gold deposit interest rates further, in which HD Bank cut gold rates to 0.7-0.8% p.a. from 1.2% p.a. and shortened gold deposit maturity to one year. – Stoxplus.com

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