golden opportunity for banks
Indian banks are into gold marketing.Yes, with diwali season in full swing, banks have caught on to the customer's fancy with the yellow metal. ICICI bank was the first to offer branded gold coins for purchase.The usp in this transaction are guarantee of 99.9 % purity of gold, 24 carat, Assay certified, lakshmi coins, available in 5g, 8 gm and 50 gm deominations.Everything has been done to tap into the deep pockets of the burgeoning middle/upper middle class segment.They have a love affair with gold. Period. They had salted their wealth in ornaments but that has become passe; how many necklaces can you wear anyway and with the law and order being what it is,one gets to wear it only sparingly.some of them really look to gold as a hedge against inflation,hence this scheme is ideally suited for them. Giving a laxmi motif on the coins is pure marketing. And doing it during diwali when laxmi is worshipped is again a very clever ploy to tap into sentimental value to promote sales.
Can one say Golden era of banking is starting and this is the first step?
4 Comments:
The mind set of our people should change. People should buy these gold coins as an investment.(Kumar may not agree that it is a good investment) Any time they need cash they should sell it without attaching the sentimental values.(the lakshmi coin sentiment).I have seen Gold has the quickest liquidity in mobilising cash. If they are going to use these coins to make ornaments in future, they should always keep in mind that when the jeweller is going to make it into a jewel the purity is going to be lost even if the jeweller is the most famous one in any city. For the cost of 919 purity they are going to get the 880 or less purity in jewels. That is why the bank coins should be treated as an investment.
yes agree.But wonder what is the business model there for banks.Are they depositing or advancing money in this transaction?where is there profit margin.Or is it a non core activity for which they will collect a service charge. Yes, banks are getting into non banking areas and this could be one of them.
then our foodworlds can do this , cant they?
Actually in Malaysia I have seen the banks selling the gold coins which are called Maple leaves (they have the Maple leaf embossed on them) The banks actually rebuy also these coins only thing is the plastic cover should not be tampered with. so many people buy these and sell it back when the price increases.
I wonder what the arrangement in India is. The testing of the genuineness of the coins from the consumers might become an issue in India.
IT is news to me and a great one at that. Tampering of a plastic shield is easily accomplished by smart people!There will be a new industry thriving because of this.
But then we have karatameters now in every shop, which was originally thought of by Tanishq. The banks can have one in their premises and value accordingly.
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