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Thursday, 25th May 2006 (4634 views)

In an effort to boost business, Indian Bank is hoping to increase retail sales of its gold coins, which it launched in March.

The government-owned bank has so far sold over 20,000 coins across its 1,400 branches but with new plans to introduce more high-value coins, it expects to have made a net income of 100 million Rupees from the coins by April next year.

A spokesman for the bank told Reuters that since margins on other banking products have been falling, selling gold was seen as a positive business decision.

Banks in India are allowed to freely import gold and sell it on. Initially, they operated as channels for jewellers, importing the precious metal only after jewellers placed an order to eliminate price risk.

However, with prices at an all-time high, increasing numbers of Indian banks are now selling to the general public.

"Banks have realised that this is an easy product to sell," said S K Bandyopadhyay, Indian Bank's general manager for new business development and financial products, during an interview with Reuters.

"If you have a large network, it's easy to get customers," he added.

 

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