Every bank’s golden opportunity!

If you thought it is only Indian women who are crazy about the yellow metal, or elderly parents using gold as an investment for the future, think again. Zoom in to Koramangala, India, the IT hub, where several youngsters buy gold coins and bars, invest in gold saving schemes through monthly instalments and allot themselves, an additional budget for light jewellery as daily office wear. Jewellers cash in on the trend by devising special schemes for the auspicious Akshay Tritiya and Diwali. The Swarndhara Scheme, akin to a fixed deposit, has helped jewelers reap a golden harvest, luring 3 lakh customers. You can even book a small amount every month, like in a savings scheme, through the Swarn Mangal Kalash, offered by another popular jeweller. Then there is Tanishq tempting with its Golden Harvest. But does the customer really benefit? What about making charges? Conversion costs while redeeming?

Fear about the financial crisis, insecurity of other assets like government bonds have made customers believe gold is a safe haven. In fact, In Germany, 1 gm gold wafers and 10gm bars can be obtained from vending machines at airports and railway stations, through GoldtoGo for safety-seeking shoppers. Money from exchange-traded funds (ETFs) will be pooled to buy gold. This is how banks are rebuilding gold reserves. ETFs save investors the bother of purchasing and keeping gold, in fact these allow buying and selling on the stock market, at wholesale rate and even guarantee purity. Paper gold, then amply proves to be the best bet for small investors.

The festive season has once again accelerated gold buying, considered part of Indian tradition. Banks and financial institutions have geared up; selling gold at lower prices than the prevailing market price. ICICI Bank has offered a discount, for online purchase of the metal, with its Pure Gold offer. Punjab National Bank and Oriental Commerce Bank have offered rebate for a single purchase of gold coins of any denomination, on a day. Will your bank be a part of the gold rush?