Corp Bank Gets Nod For Gold Dealing

Corporation Bank has rece-ived authorisation from the Reserve Bank of India (RBI) to deal in imported gold, and precious metals such as silver and platinum. The bank plans to tie up with a foreign bullion bank for the initial phase.

The imported metal could be utilised by the bank for outright sale and for lending purposes. The bank can also sell these metals to special import licence holders and returning NRIs.

The bank plans to import gold on consignment basis for bulk purchases in the first phase. The sale could be confined to the major gold consuming centres of Ahmedabad, Mangalore, Delhi, and Bangalore.

 

Subsequently, it proposes to cover 15 centres and on a retail basis too. With the first phase being one of consignment import, the bank is tying up with a foreign bullion bank.

The terms of contract are being finalised and the bank expects to import the first consignment sometime during January 1998. It has lined up big plans for gold import.

As a pioneering bank in financing diamond industry, there is a ready business available for Corporation Bank from existing diamond clients, most of whom have set up gold jewellery export units.

According to a bank statement, The bank has a strong presence in all the important centres/towns where craftsmen and exporters are concentrated. With a strong correspondent relationship with foreign banks dealing in bullion export, the bank expects to forge ahead in this business.

The bank has projected a turnover of around Rs 2,000 crore in the first year, and it expects to shore up its non-interest income substantially through this line of activity.

The banks capital funds rose to over Rs 700 crore after its public issue from Rs 399 crore as at March 1997. Further, its capital adequacy ratio now exceeds 17 per cent.