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| Gold holding service is to help local owners keep their treasure better.— Photo vietbao.vn |
by Nguyen Minh Huong
HA NOI (Biz Hub) — As the gold price continues to fluctuate, most commercial banks have boosted their gold holding services in a move to cater the local tradition of hoarding the precious metal.
According to estimation by experts, roughly 400 tonnes of gold are currently being held by local people and the practice often puts keepers at financial risk due to the volatile market. In addition there have been several reports of gold theft by burglars and even the keepers' own family members.
With this in mind, Finance and Bank specialist Nguyen Tri Hieu tells Biz Hub that it's a good move by banks to boost gold provisions, enabling people to safely store their gold for a small fee and retrieve it at any time. According to Hieu, the practice is common in foreign countries where banks function to safeguard people's assets such as gold, money and important documents.
In foreign banks, customers' assets are kept in a box which can only be opened with simultaneous use of the customer's and bank's key, say Hieu. As Vietnamese banks can't yet offer this service, they must record the customer's serial number as an asset inventory which is also sealed.
Hieu says keeping gold is one of a bank's main activities and performing the task well can earn the bank a strong reputation among customers.
Domestic selling price for gold rises slightly
Gold price increases slightly yesterday. The purchase price stayed below VND36.85 million ($1,754) while the selling price reached VND37.55 million ($1,788) per tael. On the world market, the gold price maintained its rally reaching $1,262.70 per ounce today on Kitco. The gold price in Viet Nam is still VND 5.2 million (US$247) per tael higher than the global rate.
This morning the State Bank of Vietnam sold all of its 40,000 taels to 13 different credit institutions.—VNS
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Biz Hub's quick survey of the market, found most commercial banks offer the service at similar fees, with many recording an increase in customer demand for the service.
Le Thanh Trung, deputy general director of HD Bank says demand for gold-keeping services will be higher in the future as more people buy the asset when the price falls. Ta Quang Thanh, head of transaction of Sacombank said his bank started offering the service one year and is gradually becoming more widely known. He says Sacombank only keeps SJC gold which is in good condition, fully labelled, stamped and serialised so that it can be stored immediately without additional checks.
According to Tran Thi Phuong Yen, a bank teller at Sacombank in Doi Can Street, the fee for keeping a tael of gold is VND10,000(US$0.5) per month and there is no limit to the amount of gold that can be kept. Most importantly, Yen says: "We will seal their gold in a safe package so that they can access their gold whenever they want."
However, not all the banks keep customers' gold in the same way. A representative of DongA Bank tells Biz Hub that they do not seal or record the customers' gold deposit, they only record the series number of the gold when they return it to customers.
Besides DongA Bank, some commercial institutions also follow this practice. This has led to rumours that some banks use their customers' gold for their own activities, in other words, they disguise gold mobilisation as "gold keeping" to conform to the SBV's 2012 regulation that forbade banks from continuing the practice. It should be added that no one has produced any clear proof to support this speculation.
On the matter, expert Nguyen Tri Hieu says: "I appreciate the service as it is helpful for customers and aids banks in developing more services," adding that those which break customers' trust by violating the rule, should be dealt with under current laws.— VNS