City-dwellers are being tempted by 1% interest rates to put their gold on deposit in a bank...
INDIAN BANKS are sucking in hundreds of kilograms of Gold Bullion through several innovative gold deposit schemes, reports Commodity Online from Ahmedabad.
India's largest bank – the State Bank of India (SBI) – has collected a whopping 548 kilogram of gold through an innovative gold deposit scheme it launched two months ago.
SBI officials said that the unique scheme attracted 548 kilograms of precious yellow metal deposits in a short span of two months in the western state of Gujarat alone.
The bank said the gold deposit scheme plans to put to productive use the near 15,000 tonnes of gold reserves lying idle in Indian households.
"Obranches in four centres of Gujarat – Ahmedabad, Surat, Rajkot and Vadodara – have attracted 548 kgs of gold in the last two months," a senior SBI official said.
He said the gold desposit scheme has done exceptionally well in Ahmedabad, with 80% of Gujarat's deposits coming to bank vaults from the city.
A survey from SBI said that largely it is individuals who are depositing gold in the bank vaults. Two religious trusts have also deposited their gold reserves with SBI.
SBI launched the gold deposit scheme in mid-March this year as part of a government initiatives to put the country's "idle" gold reserves into circulation.
Like SBI, several other banks are launching gold deposit schemes, taking in gold they can then lend out and paying interest to the depositor. They include HDFC Bank, ICICI Bank, Bank of Baroda and Federal Bank.
SBI is currently offering to pay depositors 1% per year for 3 years, 1.25% for 4 years and 1.50% for 5 years.
Officials at India's Finance Ministry said that three nationalised banks including SBI have been designated by the government to accept gold as deposits.
Several banks, broking houses and post officials have also been carrying out several gold deposit and Gold Coin selling schemes. India is the largest consumer and importer of gold in the world.
Gold coins are the hottest commodity. Even as the Gold Price continues to rise, sales of gold coins are taking place at a brisk pace through banks, equity and commodity broking companies, finance firms and post offices across India.
India Post, the post services department of government of India, launched the Gold Coins sale initiative six months back in association with Reliance Money and World Gold Council. As per the currency scheme, the postal department is selling 0.5 gm, 1 gm, 5 gm and 8 gm gold coins packed in tamper-proof sealed covers.