The $22 billion gold volume approximates the country’s foreign-exchange reserves, economics experts said at a conference on Thursday, where they convened to find ways to make use of the public’s gold reserves once the ban becomes effective.

Vietnam imported some 500 tons of gold from 1990 to 2011, most of which has been made into SJC gold bullion.

There are approximately 12 million taels of gold in the country, said Doctor Nguyen The Hung, chairman of the Vietnam Gold Investment and Trading Corporation (VGC), citing figures from the Swiss banks, the country’s main source of gold.

“If half of the gold reserves are mobilized, we will have $10 billion circulated in the economy,” he said.

On April 29, 2011 the central bank halted gold mobilization at banks, but lifted the ban a year later, ruling that the credit institutions would still be able to accept savings in gold bullion until November 25, 2012.

The prohibition was decided upon in a bid to reduce the economy’s reliance on gold, but the central bank should have taken into consideration the habit of Vietnamese people of keeping gold as an asset, said Tran Du Lich, deputy head of the Ho Chi Minh City National Assembly Delegation.

Lich criticized that the SBV has “evaluated the issue in a very simple view.”

“Gold is not a normal commodity. It’s a foreign currency and this should never be forgotten,” he emphasized.

Gold certificates

The gold mobilization ban will cause many problems for both banks and the public, said Nguyen Thanh Long, chairman of the Gold Business Association.

After November 25, banks will no longer mobilize gold deposits, and gold shops will not be allowed to sell the precious metal.

“The public will surely be anxious about that. They do not know where to keep their gold, as it’s unsafe to store the precious metal at home,” he said.

Nguyen Tuan Quynh, a member of the board of directors of the Phu Nhuan Jewelry Co, and Hung, from the VGC, said the central bank should issue gold certificates if they are to ban gold mobilization.

“The public will exchange their gold bullion for the certificates, and can later withdraw or sell the gold,” said Quynh.

“Gold investors can also use money to buy the certificates and use them instead of the physical gold bars, which is safe and costless, while also helping to avoid buying fake or substandard gold bullion.”