'Gold Accummulation Scheme' attracts bankers

Mumbai, Nov 18: The yellow metal has attracted the attention of bankers which are vying with one another to increase the deposits, responding to a call given by the Union Finance Minister P Chidambaram.

The proposed scheme, to be christened as ''Gold Accummulation Scheme'', will be in the form of a systematic investment plan. The Minister had asked the bankers to set up deposit mobilisation to ensure smooth deposit growth which is yet to reach a remarkable level unlike the credit growth.

Though schemes of similar nature had been launched by the banks few years back, they could not become popular due to a few drawbacks.

Taking a lesson from the past, the banks are cautious before giving it a go ahead.

The Indian Bank Association (IBA) had convened a meeting on the issue here recently which was attended by representatives of banks like State Bank of India, Bank of India, IDBI and others.

Confirming the meeting, an IBA official told UNI that ''Most of the banks are ready to implement the gold-based deposit scheme in the revamped mode. However, they will have to wait until the approval comes from Reserve Bank of India (RBI) for the proposed 'Gold Accummulation Scheme'. The IBA official further said the IBA was preparing an application in this connection to be submitterd before the RBI for its approval in near future.

Explaining the proposed scheme, a bank official said that a customer can keep on depositing funds or buying gold as per his convenience over a period of time and he will be issued a receipt after charging a ''forward cover'' for the same each time he does it.

However, on completion of the specified period of time (which may range between five and ten years), he can withdraw the gold at the market prevailing price. It will help the customer arrange for the jewellery of the yellow metal as may be required for his daughter's marriage. On the other side, the bank will take the gold to the commodities market to earn its revenue.

UNI