source :L. N. Revathy ,BusinessLine,Coimbatore,May 24,2010
The yellow metal hasn't lost sheen and the lure of gold (be it ornaments or coins) remains strong despite soaring prices.
Huge volumes of gold were picked up a week ago, on the occasion of Akshaya Tritiya (on May 16). Banks capitalised on customer sentiment by offering 24-carat gold coins and bars at discounted rate.
Mr Puneet Kapoor, Head (Product and Process), Retail Liabilities and Branch Banking of Kotak Mahindra Bank, while admitting the hike in prices of gold, said, “The Indian psyche is such that the investor still considers a token engagement (purchase) is auspicious and important.”
Though Kotak Mahindra Bank is not a big player in retailing of gold coins and has been operating in this space only during the last four years or so, it had doubled the sale this year (compared to the last). “We sold 80 kg during the week of Akshaya Tritiya which was double of what we sold last year same time in spite of the price being approximately 16-18 per cent dearer.
The maximum demand was for the 20 g coin, which accounted for 33 per cent of the total volumes sold, followed by 5 g (32 per cent), 8 g (27 per cent) and 50 g (8 per cent),” Mr Kapoor said. “Since customers were given an option to book in advance, we were able to meet their requirements,” he added.
Out of Kotak's total branch network of 249, only 177 designated branches were involved in the sale of gold coins and bars. Gold was quoting around $908 an ounce around last Akshaya Tritiya. It rose to a little over $1200/ounce during Akshaya Tritiya this year.
Responding to a query, he said, “sale to non-bank customers accounted for about 20 per cent of the total sale. However, it would be just about 10 per cent in value terms because for a non-customer the only medium available to buy gold is against cash and that is capped at Rs 50,000 according to the RBI regulation.”
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