The Hindu Business Line : IOB sells 36 kg gold on launch day

Indian Overseas Bank today began gold retailing with a "better than expected" performance on the first day. The bank sold over 4,600 coins of various weights, totalling 36 kg. At today's prices, this would be valued at close to Rs 3.25 crore.

The coins sold by IOB are minted by Pamp of Switzerland with the `IOB' name and logo embossed on them.

The bank's General Manager, Mr V. Krishnaswamy, told Business Line that the main idea behind launching the product was not so much profits as the desire to offer a full suite of products for its customers.

"It is a business secret," the bank's Chairman and Managing Director, Mr T. S. Narayanasami, told journalists on the sidelines of the launch-function here today when asked about the margins in the business.

It was said at the press conference that "the prices are competitive to attract customers". Arrangements have been made to sell the coins in retail through 63 designated branches across the country, Mr Krishnaswamy said.

Safe option

"Our private market survey reveals that the investing public by and large prefer a safer and, at the same time, attractive investment proposition and hence prefer to invest in gold," says a background note issued by IOB.

Although the gold retailing product, which IOB calls `Fine Gold', was launched only today, the bank has been in gold business since 1997, when the RBI appointed the bank as one of the nominated agencies to import and sell precious metals in the Indian market.

Over the years, IOB has sold 27 tonnes of gold valued at Rs 9,984 crore, the background note says.

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