Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
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BANKS<br />
The Reserve Bank of India (RBI) - on 30 August 1997 - authorised the first banks to import gold bullion<br />
for the domestic market. The first imports occurred in November.<br />
Although the RBI has authorised 20 banks, this section focuses on the 6 <strong>Indian</strong> and 4 foreign banks that were active<br />
importers in 2001.<br />
Banks may not export gold, or hedge its value. All rely on consignment stocks from international dealers. They sell the<br />
bulk of imported bars to less than 50 large secondary tier bullion dealers.<br />
Banks can sell gold on an “unfixed” basis for up to 5 calendar days. The minimum quantity is normally 50 – 100 TT’s.<br />
None offers a buy-back service. There are now 111 <strong>Gold</strong> Cell branches servicing customers in 34 cities in 16 States.<br />
Branches in cities, when State sales taxes are low, tend to attract the bulk of imported gold.<br />
AUTHORISED BANKS<br />
The Reserve Bank of India (RBI) has authorised 20 banks in 3 bank categories to import gold under the OGL<br />
scheme: 12 Public Sector Banks, 3 Private Sector Banks and 5 Foreign Banks.<br />
Public Sector Banks Authorisation date Date of first import<br />
Allahabad Bank * 1997 August 1998 January<br />
Bank of India * 1997 August 1997 November<br />
Canara Bank 1997 August n.a.<br />
<strong>Indian</strong> Overseas Bank * 1997 August 1997 November<br />
State Bank of India * 1997 November 1997 November<br />
Corporation Bank * 1997 November 1998 January<br />
Oriental Bank of Commerce 1998 March n.a.<br />
Bank of Baroda 1998 April n.a.<br />
Syndicate Bank 1998 December n.a.<br />
Dena Bank 1999 January n.a<br />
Punjab National Bank * 2000 January 2000 September<br />
Union Bank of India 2002 May (approx) n.a.<br />
Private Sector Banks Authorisation date Date of first import<br />
Global Trust Bank 2001 January n.a.<br />
ICICI Bank 2002 May (approx) n.a.<br />
HDFC Bank 2002 May (approx) n.a.<br />
Foreign Banks Authorisation date Date of first import<br />
ABN-AMRO Bank * 1997 August 1997 November<br />
Bank of Nova Scotia * 1997 August 1997 December<br />
Standard Chartered Bank * 1997 August<br />
2000 January (reissued) 1997 December<br />
2000 June<br />
Commerzbank 2000 January n.a.<br />
HSBC * 2000 July 2000 October<br />
Sources: Reserve Bank of India and banks. * These banks were reported as active importers in 2001.<br />
The <strong>Indian</strong> Government has a shareholding in 11 of the 12 Public Sector Banks. The RBI is a major shareholder of the State<br />
Bank of India.<br />
The RBI authorised 3 of the listed banks around May 2002: Union Bank of India, ICICI Bank Ltd and The HDFC Bank Ltd.<br />
This section does not cover them as they are in the process of becoming active.<br />
ELIGIBILITY<br />
The RBI authorises only scheduled commercial banks.<br />
The bank should have a minimum capital base of Rs 300 crore (US$ 650 million) for its business in India. The ratio of total<br />
capital to risk-weighted assets should be 9% or more. It should have an advanced risk management system in place, as<br />
well as an excellent business reputation and history. In the absence of previous gold-related business experience, it should<br />
provide evidence of its ability and intention to forge links with international banks to develop in-house gold market<br />
capabilities.<br />
60<br />
AN INTRODUCTION TO THE INDIAN GOLD MARKET