State Bank Spots 50 Branches For Gold Schemes

The State Bank of India has identified 50 branches for marketing its gold banking schemes which it plans to launch during the current financial year.

Confirming this senior officials of the State Bank of India said that the bank is working on a strategy targeted at the retail and wholesale segments. At present the bank offers limited gold banking services through only 5 branches.

The SBI officials also did not rule out the possibility of a tie up with international gold banks. The Tarapore Committee on capital account convertibiilty had suggested that in Phase I gold trade should be liberalised.

 

Among the schemes thought of include one where the bank would offer gold denominated bonds, deposits and loans carrying a nominal rate of return.

This would ensure that the investor derived the benefit of having invested in gold besides earning a reasonable rate of return. The banks are also likely to design schemes for attracting the huge volumes of gold held by the individuals.

The third option could be to offer gold accumulation plans and this could be positioned as a savings instrument.

Under this scheme the individual deposits a predetermined amount of rupees on a monthly basis against which physical delivery of gold is given on maturity. At the wholesale end, the banks could offer gold loans to jewellers and provide them necessary working capital assistance.

SBI officials pointed out that they would have to upgrade their skills in this business before starting off in a big way.

The banks need to hedge themselves to the extent that the deposits and loans are not hedged.

It may be recalled that the in a step towards capital account convertibility, finance ministry during mid October had authorised eight banks to sell gold, silver and platinum in domestic market without licence or surrendering the specific import licence.

These bank include SBI, Bank of India, Canara Bank, Indian Overseas Bank, Allahabad Bank, Bank of Nava Scotia, Standard Chartered and ABN Amro Bank.