ICICI Bank plans to double retail gold sales

ICICI Bank, one of the leading private sector bank in the country, is planning to launch a new scheme to provide liquidity against gold. With the launch of the new scheme, the bank, which is already into business of retailing gold, is all set to double its retail gold sales to over two tonne by the end of the current financial year.

"Perhaps we are the only bank in organised gold retailing. By providing liquidity against gold, retail gold sales by our bank is set to double to over two tonne by the end of the current financial year compared with one tonne in last financial year," Anup Bagchi, general manager, retail liabilities, ICICI Bank, said to Business Standard on Wednesday.

ICICI Bank started retailing gold from its three branches in October 2002 and, at present, it sells gold at 240 of its branches. The bank retails gold in five gram and eight gram packs, which at present cost Rs 3,600 and Rs 5,700, respectively. Recently, the bank introduced one gram pack too. The bank sells over three lakh pieces of gold coins every year.

"The purity of gold is certified by an international agency and the gold sold by our bank is perhaps the purest form of gold available in the country (99.99 per cent pure). During Diwali, gold sales goes up over 10 times," said Bagchi.

The bank's current business of retailing gold comes to around Rs 120-150 crore and with around 40 per cent growth in business, it is targeting to cross business of Rs 200 crore by the end of the current financial year.

"We will provide liquidity of over 80 per cent against our gold coins. With this new scheme, we are targeting to more than double our gold retail sales. The increased prices of gold at the international level may have an impact on institutional buyers but retail customers are not affected as they keep buying gold on every festive occasion," said Bagchi.

Indians are known for their insatiable appetite for the yellow metal, but recent imports have broken all previous records.

Explained by analysts as largely a function of the growing perception of gold being a credible investment option rather than the recent relaxation of import norms, bullion imports by all major trading companies and designated banks rose in the first half of 2004-05.

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Golden ways

• To launch a new scheme to provide liquidity against gold
• Bank to double its retail gold sales to over 2 tonne by the end of the current fiscal year
• Bank sells gold through 240 branches
• The bank retails gold in five gram and eight gram packs, which at present cost Rs 3,600 and Rs 5,700, respectively