The gold coin rush

As the gold buying season kicks off, many banks — both private and public — have rolled out gold coins of different denominations for you. Banks such as Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, Syndicate Bank, Union Bank, Corporation Bank and Indian Bank are all offering gold coins that you can purchase from the bank’s counters.

These coins are minted with the logo of the bank and come in standard pure gold form, weighing from as little as 2 gram to 5, 8 and even 100 gram coins.

It’s not only banks that sell these coins. Reliance Money, a part of ADAG’s financial services unit Reliance Capital, has launched smaller variants of gold coins weighing as low as half a gram. This coin is attractively priced at Rs 676 for 0.5 gram and Rs 1,230 for 1 gram coin and as a part of a festive offer, the company is giving a silver coin free along with the gold coin.

Check the prices that banks are offering compared to, say, gold retailers as prices could tend to vary hugely between them. Banks are charging a premium against many gold retailers. Bankers say that people tend to feel safe when buying gold from banks as against from a jewellery shop.

Says Suresh Pai, Executive Vice President (Marketing), IndusInd Bank: “The coins are imported from overseas and have a certification of purity. The same may not be available with jewellers, and even if it is available, people may not be comfortable with the certification”. Also most banks offer 24-karat 99.99 per cent coin sourced from the best refineries of the world.

Another point to note is that banks are not allowed to buy back the gold coins sold by them. So, one would have to sell the coins to a jeweller, who will not pay you the same amount that you have paid to the bank. On the other hand, most jewellers have a buy-back facility and you are assured of a fair market price for your coin.