Despite gold becoming dearer, the retail appetite for buying coins from banks has not flagged this festival season, say bankers.
“There is definitely some traction in sales vis-à-vis last year despite the rise in price of gold. There is less mark-up due to surging gold rates. However, we do anticipate a growth of about 20 per cent compared with last year,” said Puneet Kapoor, Executive Vice-President, Kotak Mahindra Bank.
The private sector bank had sold 125 kg of gold last Diwali season, while in the current it has sold about 143 kg till last week, with much of the sales coming from the 5, 8 and 20 gm categories.
Banks are selling gold coins in the denomination of 2, 4, 5 and 8 gm, and gold bars in the 10, 20 and 50 gm categories. Special discounts are being offered on purchase of gold coins through debit and credit cards. Many banks, including Bank of Baroda and Kotak Mahindra Bank, kept their branches open on Sunday as well.
Further, banks and jewellers are cashing in on this season through special loyalty schemes and discount offers, expecting consumer sentiments to drive growth this Diwali. The difference in the prices between jewellers and banks vary in the range of Rs 100-125 a gm on an average.
“Though many consumers prefer to buy from jewellers due to relatively cheaper rate, households prefer to buy gold coins and bars from banks as we offer more reliability with certified quality of gold,” said Aatmaram, General Manager, Andhra Bank.
“We are seeing sale of about 2 kg of gold coins on a daily basis,” he said.
A Bank of Baroda official said, “Though the lower segment will be dissuaded from buying due to a significant price rise, the demand from high net-worth individuals or the well-to-do segment will continue to grow.”