The Hindu Business Line : Gold-based deposit scheme

The significant aspect of the scheme is that the banks are entering into gold futures trade with the objectives of helping the small investor by promising gold through SIP (systematic investment plan) and making eventual gains on account of the level playing field available in futures transactions. Similarly, the commercial banks could moot appropriate deposit schemes through SIP for entering into cash/futures markets in respect of equities and mutual funds.

Currently, the mutual funds run by the banks are separated as distinct identities and the public may have certain reservations about aligning with these outfits for fear of uncertainty in returns.

The banks could devise new deposit schemes with assured constant returns that are a little more than the usual deposit interest rates, with lock-in-periods to attract new customers.

Separate packages could be designed for cash and futures markets.

In effect, the banks should make use of the avenues offered by the growing equity/commodity markets for the benefit of customers and for increasing non-interest income.

C. P. Velayudhan Nair

Kochi

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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