The Hindu Business Line : IOB sells 225 kg gold in 1st month

In the first month of launching its gold trading business, Indian Overseas Bank sold 225 kg of the precious metal for a value of Rs 20 crore. "The first consignment (of 200 kg) has been completely sold out. The second consignment (of 250 kg) has arrived," Mr V. Krishnaswamy, General Manager, IOB, told Business Line. In fact, part of the month's sales were out of the second consignment. Asked about margins in the business, Mr Krishnaswamy said they varied depending upon the market price. But he said that the margins ranged between 2 and 4 per cent. In the full year, IOB expects gold sales between 1,000 kg and 1,500 kg. The bank plans to introduce 100 gm coins shortly. Sources said that IOB was among the first few banks to enter gold trading. ICICI Bank and HDFC Bank have been in this business for over a year. Although banks do earn some income on this business, they sell gold more as another service to customers rather than with a profit motive.

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