RBI Allows 7 Banks to Import Gold, Silver.

As per the data on the RBI website, other banks who have been given permission by the apex bank to import the yellow and white metal are Karur Vysya Bank, Punjab & Sind Bank, South Indian Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, and State Bank of Travancore.

With this, the total number of banks that can ship precious metals in the country rose to 30. Banks contribute over 80 per cent of the 700 tonnes that India annually imports to trade in bullion at the wholesale and retail level.

The bullion industry is gung ho over RBI’s latest move, which would help the network of gold supply to widen and thereby add to some fair competition.  Jewellers also sell both gold and silver coins and bars through retail outlets. The mandate for additional banks to import precious metals are likely to increase purchases and also help banks in boosting their gold lease facility for manufacturers.

Gold loan is a facility given to manufacturers where the bank leases the yellow metal, upon guarantee that they would pay the proceeds of the loan in a maximum of 180 days.

Observers in the bullion market maintain that demand for gold investment may have risen in the second half of 2010  as a result of perceptible shift in preferences from jewellery to exchange-traded funds (ETF), bars and coins gathers pace.

At the same time, traditional jewellery buyers in India are shifting their preferences to coins as they see great potential for a huge growth this calendar and a bullish price outlook.

Experts view that sales of investment products could outpace jewellery demand in the next one to two years.

Source : deccanherald.com