The Hindu Business Line : Bankers hope to see rise in gold coin sales

Kolkata, Oct. 28 The sale of gold coins by banks might experience a quantum jump this year given the uncertainty in domestic stock markets, according to senior bank officials. Banks have already witnessed a significant rise in demand for gold coins and ingots from consumers this year.

Historically, there has always been a spurt in gold consumption during the festive season. This time the demand could be higher given the way the stock markets have moved in the past few weeks, bankers said.

“India has witnessed a spurt in demand for gold not only because of tradition but also because it is now considered an attractive investment option,” Mr Sumanth Kathpalia, Head of Consumer Banking, IndusInd Bank Ltd, told Business Line in response to a questionnaire.

According to Mr V. Krishnaswamy, General Manager, Indian Overseas Bank, the bank’s sale of gold coins so far this year has been higher compared to that in the corresponding period last year. “People have come to realise that in the present situation, there is not much money to be made in the stock markets, so gold buying, both for investment and consumption purposes, has seen a significant rise,” he pointed out.

Demand outlook

The overall sale of gold coins of Indian Overseas Bank in 2007-08 was at about 550 kg. “In the first half of this year, we have already achieved sales of about 340 kg and we anticipate it will be more than double in the remaining half of the year, with demand picking up during the festive season particularly on occasions such as Dhanteras and Akshaya Tritiya,” Mr Krishnaswamy said.

Mr K.V.S. Manian, Head-Retail Liabilities and Branch Banking, Kotak Bank, said, “The demand usually peaks during the festive season and now, coupled with the way the stock markets have been behaving, we expect a higher growth this year.”

Kotak Bank expects to clock gold sales worth 250 kg this year, up from 200 kg last year, he said.

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