Foreign Banks Take Shine Off Mmtc, Stc Gold Business

Exporters are reaping the benefit of the governments new gold import norms, with foreign banks offering gold on better terms than the state-owned MMTC and STC.

The banks, recently allowed to import gold, are offering it to exp-orters at a transaction cost of just 0.5% against the 2-3% offered by MMTC, HHEC and STC, commerce ministry sources said.

Further, the banks are utilising the ministrys recent decision to make bank guarantee terms flexible aimed at encouraging competition among gold suppliers to offer better guarantee terms to customers.

The banks also have an added advantage of having branches all over the country, which enables them to supply gold at lower costs. The RBI had earlier allowed eight banks Standard Chartered, Bank of Nova Scotia, ABN Amro, Allahabad Bank, Bank of India, Indian Overseas Bank, IndusInd and Canara Bank to operate these schemes.

 

Senior ministry officials pointed out that the operation of these banks has led to a 15-16 per cent growth in gold jewellery exports in the past three months whereas overall exports have grown at a far slower pace.