Vietnam Daily News

Vietnam Central Bank Inspects Gold-Backed Lending at Mecash

Written by Dailynews.vn Friday, 16 December 2011 17:45

Hanoi-based State Bank of Vietnam, on December 9, formed a group to inspect the gold-backed lending activities at Maritime Express Cash (Mecash) and its relationship with Vietnam Maritime Commercial Joint Stock Bank (Maritime Bank).

Hanoi-based State Bank of Vietnam, on December 9, formed a group to inspect the gold-backed lending activities at Maritime Express Cash (Mecash) and its relationship with Vietnam Maritime Commercial Joint Stock Bank (Maritime Bank), the local newswire DVT.vn reported.

Due to the seriousness of the case, the central bank performed another inspection on December 12, said Nguyen Van Hung, deputy director of the municipal central bank. "Result of the inspection will be disclosed on December 14", Hung added.

Mecash, which is claimed to be an affiliate of Maritime Bank, was reported to offer gold-backed loans at interest rates of as high as 54 percent per annum (or interest payment of VND1,500 on a VND1 million loan per day).

Mecash was just a pawnshop and had no relationship with Maritime Bank, commented an unnamed representative of the bank, yet saying that Maritime Bank Securities JSC (MSBS) is currently holding below 20 percent stake at Mecash.

Earlier, the central bank issued Circular 33, tightening the regulations for providing gold-backed loans by credit institutions and raising the risk coefficient of gold-backed loans up to 250 percent.

Source: www.intellasia.net/news/articles/finance/111350956.shtml