Banks' gold coin sales lose sheen

The recent surge in gold prices has hit banks, as they are witnessing a discernable dip in the sale of gold coins.

Thanks mainly to the increasing popularity of the yellow metal among both small and big investors, many banks entered into gold coin/bar sales during the last one year. They are now selling coins of lower denomination too — 2 gm, for instance.

“Sale of gold coins earned good revenue for banks till last quarter. But now, there is an over 20 per cent dip in sales of these coins,” a senior officer of Punjab National Bank said.

A significant part of banks' coin sales is driven by retail/individual buyers who are now uneasy about the steep hike in the price and are expecting it to come down, say bankers.

Agreeing that there was a dip in gold coin sales, Mr Anjaneya Prasad, Executive Director, Syndicate Bank, said the general sentiment in the gold market was being reflected in banks' sales as well.

FESTIVAL DEMAND

“There could be some revival in the ensuing festival season but it remains to be seen how the market evolves,” he said, adding that Syndicate was going ‘slow' on gold coin sale this year.

Mr Gopinath, a senior functionary of State Bank of India, said that SBI too felt that the decrease in gold sales was reflective of the market trend .

In the last two months, the sale of gold jewellery had come down across the country, Mr A. Palani Kumar, General Manager, Titan Industries Ltd, told Business Line recently.

Some banks might as well gain in a different way. “Those banks which purchased higher quantities of gold before the price hike about two months ago might stand to gain. But this is an exception,” the PNB official said.

Banks, however, were not willing to share the exact numbers by which gold coin sales have fallen and their impact on revenue.