Business Standard

Titan to raise Rs 524 cr from revamped gold deposit scheme

Six-month, 10-month schemes launched with effect from November

Mahesh Kulkarni Bengaluru
Titan Company has launched its revamped gold deposit scheme with effect from November 1. It proposes to raise Rs 524 crore from the public under the new scheme which will close on September 30, 2015.

The company has launched two schemes with a maturity of six months and 10 months. The minimum deposit in both the schemes is Rs 5,000. In the 10-month scheme, a customer has to pay one installment every month. The customer is mandatorily required to redeem before 390 days from the date of payment of the first installment.

“Since, it is a jewellery purchase scheme, there is no return offered as interest. However, discount is offered at the time of purchase of jewellery to the extent of 75 per cent of one month’s installment as discount upon completion of 365 days from the date of joining the scheme,” Titan said.
 

In the six-month scheme, the customer has to pay six installments and the scheme matures after 180 days from the date of joining the scheme. The deposit has to be redeemed before 240 days from the date of payment of first installment.

In case of the six-month scheme, 20 per cent of one month’s installment as discount will be given on completion of 180 days from the date of joining the scheme. However, there will be no discount if the customer redeems before 180 days, the company said.

The mode of payment of installments is either through cash, cheque, DD or electronic payment towards the monthly advances.

Titan said the scheme would be in force till September 30, 2015 or the date of the company’s annual general meeting in 2015, whichever is earlier.

Titan has been operating the jewellery schemes for over a decade. According to the Companies Act, 2013, the advances collected under these schemes are construed as deposits. The company had discontinued the gold deposit scheme (Golden Harvest Scheme) in July this year after the new Companies Act termed gold deposit scheme as a public deposit scheme.

The new act has put a cap on the returns offered by the companies to deposit holders to 12 per cent and capped the total amount of deposits to 25 per cent of their net worth.

The new scheme has been rated MAAA by credit rating agency Icra that states it to be stable and carries lowest credit risk, valid till September 2015.

Titan has an outstanding amount of Rs 62.96 crore collected from customers under erstwhile jewellery purchase schemes that were not construed as deposits. During 2013-14, the company accepted Rs 149.54 crore from 127,348 depositors.

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First Published: Nov 09 2014 | 8:41 PM IST

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