Jun 12, 2000|
Canara Bank joins the gold wagon
In a bid to tap idle gold to the tune of over 13,000 tonnes from the Indian household sector, the Bangalore based Canara Bank on Saturday launched its gold deposit scheme. With the launch of the gold linked scheme, Canara Bank has become the third bank to offer such a product. At present only State Bank of India (SBI) and Mangalore based Corporation Bank are offering gold linked deposit scheme.
Although the rates offered by all the banks are similar, depositors will now have one more option to park idle gold and earn a handsome interest on it.
The Canara Bank's gold bond scheme may look more attractive to deposit holders, as the maximum maturity period for the deposit is five year as against seven-year period pegged by the other two nationalized banks. However Canara Bank's gold bond scheme may not find many takers as the bank does not have a very good brand value vis-à-vis Corporation Bank which is also trying to tap the southern market from where the maximum amount of yellow metal is expected to flow into the scheme.
The gold bond scheme offered by Canara Bank is a transferable fixed deposit scheme, which also offers rupee loans to deposit holders. This scheme is an open-ended scheme having a minimum maturity period of three years. The scheme is transferable by endorsement and delivery and offers repayment in the form of cash or gold.
For a three-year maturity period, Canara Bank is offering an interest rate of 3 %, 3.25 % for four years and 3.5 % for a five-year period. The interest rate offered by the bank on gold deposits is in line with the rates offered by SBI and Corporation Bank. Under the scheme, the deposit holders will have the option of getting back either gold or cash on maturity of the deposit. The gold deposit can be in the form of gold biscuits or jewellery. During the current fiscal, the bank plans to rake in around 200 kg of gold from depositors. So far SBI has managed to mop up over 4,000 kilos of gold through its gold deposit scheme. Meanwhile Corporation Bank has garnered over 250 kilos of gold under the scheme.
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