comparative studies of gold coins among 17 banks
DESCRIPTION
It will help investor to buy gold coins in cheap rate from banksTRANSCRIPT
Chapter 1: Introduction, Research Methodology
& Design
1
1.1 INTRODUCTION
GOLD COIN
For centuries, gold has been considered a symbol of security & prosperity. Indians
buy or present gold extensively on important occasions, be it a wedding or some
religious festival. It is considered to be one of the safest forms of storing wealth.
These aspects of Indian culture has made India the world's largest consumer of gold.
According to World Gold Council, India mines 3% of Gold of what total World
produces but consumes 70% of total Gold. India is the largest market for gold
jewellery in the world, representing a staggering 746 tonnes of gold in 2010. People
of India also see Gold as an investment. They buy gold coins for safety of their future.
In past 10years, Gold has given approx. 465% return on investment. Seeing the craze
for yellow metal RBI has decided to give permission to sell Gold coins by banks.
1.1.1SOME FACTS ABOUT GOLD COINS SELLING BY BANKS
i. The Gold Coins mainly comes in the denominations of 0.5gm, 1gm, 2gm,
2.5gm, 4gm, 5gm, 8gm, 10gm, 20gm, 50gm and 100gm. Only few banks sell
Gold Coins of all denominations.
ii. Gold coins are available in 24 Carrot pure gold of 999.9/ 99.99% purity /
fineness in a tamper proof certicard packs with assay certification, signifying
the highest level of purity as per international standards. While most of the
banks are importing gold coins manufactured in the refineries at Switzerland,
others are selling indigenously manufactured coins at par with International
standards.
iii. The prices quoted by various banks are exclusive of VAT & other local taxes.
The VAT is normally 1% throughout the country. However, some states are
charging the VAT & other taxes at 1.1 % of the sale amount.
iv. Banks have not been permitted by Reserve Bank of India to buy back the gold
coins.
v. RBI guidelines restricts banks in selling gold coins in cash if the amount is Rs.
50,000/- & above. Hence no one cannot purchase Gold coins worth Rs.
50,000/- & above against cash but it can be by way of debit to respective
account or against tender of cheque(s) or other instruments or funds transfer
2
by other means viz. RTGS/NEFT etc. Some banks also offer the facility of
payment through swiping of Debit / Credit Card.
vi. Banks are quoting rates of gold coins on daily basis approx. at 10.30 – 11.00
AM except on Sundays or notified holidays. Since the price of gold could vary
in international market mid-day, banks can change the rates during the day
also. Hence the rate that would apply would be the one at the time of actual
purchase.
vii. A few banks are offering higher discounts and offers to allure the investors.
Don’t be misguided only by looking at the discount and freebees or home
delivery service offered by the respective bank. Ensure to check the final rates
of the Gold Coins (after deduction of the discount from the Base price) before
taking any decision.
Fig. 1.1 PURITY/FINENESS AND COIN SIZES PROVIDE BY BANKS:
Sl. No. Name of the Bank Purity/
Finenes
s
Coin Size (in gms)
1 Allahabad Bank 999.9 2, 4, 5, 8, 10, 20
2 Andhra Bank 999.9 2, 4, 5, 8, 10, 20,50
3 Bank of Baroda 999.9 2, 4, 5, 8, 10, 20, 50
4 Bank of India 999.9 4, 5, 8, 10, 20, 50
5 Canara Bank 999.9 8, 10
6 Central Bank of India 999.9 2, 4, 5, 10
7 Corporation Bank 999.9 2, 4, 5, 8, 20, 50, 100
8 Indian Bank 999.9 2, 4, 5, 8, 10, 20, 50
9 Indian Overseas Bank 999.9 2, 4, 8, 10, 20, 50, 100
10 Oriental Bank of Commerce 999.9 5, 8, 10
11 Punjab National Bank 999.9 2, 5, 8,10, 20
12 Punjab & Sind Bank 999.9 5, 8, 10, 20
13 SBI/ SBM/ SBT/ SBOP 999.9 2, 4, 5, 8, 10, 20, 50, 100
14 State Bank of Hyderabad 999.9 2, 4, 8, 10, 20
15 Syndicate Bank 999.9 4, 8, 10, 20, 50
3
16 Union Bank of India 999.9 2, 5, 8, 10, 20, 50
17 AXIS Bank 99.99% 5, 8, 10, 20, 50
18 Dhanlaxmi Bank 99.99% 5, 10
19 Federal Bank 999.9 1, 2, 5, 8, 20, 50, 100
20 HDFC Bank 99.99% 2.5, 5, 10, 20, 50, 100
21 ICICI Bank 99.99% 0.5, 1, 2.5, 5, 8, 10, 20, 50
22 IndusInd Bank 99.99% 5, 10, 50
23 KarurVysya Bank 99.99% 4, 8, 10, 20, 50, 100
24 Kotak Mahindra 99.99% 5, 8, 20, 50, 100
25 South Indian Bank 99.99% 4, 8, 20, 50, 100
Fig. 1.2 DISCOUNTS GIVEN BY BANKS
BOB 1 % discount available to existing customers/Bulk purchasers.
OBC 3% discount on purchase of up to 3 gold coins, 4 % discount on purchase
of 4-9 Gold Coins and 5% discount on purchase of 10 & above Gold
coins of any denominations by a single purchaser.
PNB Discount on single purchase by a single purchaser on a single day of 2gm
or 8gm – Up to 5 coins – 5%, minimum 6 or more coins – 6%. For 5gm,
10gm and 20gm – Up to 5 coins – 3%, minimum 6 or more coins – 4%.
Staff – 5%. (From 01-09-12 to 31-03-13).
P&SB 3% discount on purchase of 1-3 gold coins, 4 % discount on purchase of
4-9 Gold Coins, 5% discount on purchase of 10-49 Gold Coins and 6%
discount on purchase of 50 Gold Coins & above. 2% additional discount
to staff.
Axis Special discount to Priority Banking customers.
Federal 4% discount on sale of gold coins till 31-03-2013 on account of
AkshayaTritiya(festival).
ICICI 8.00% discount on all denominations of gold coins for purchasing the
gold coins online.
4
1.2 RATIONALE OF THE STUDY
In gold coin selling segment where the PNB stands among the other banks and
suggest the solution how they can achieve better position in the competition.
1.3 STATEMENT OF THE PROBLEM
“To find out the position of PNB among the other banks who sell Gold coins."
1.4 OBJECTIVES OF THE STUDY
1.4.1 PRIMARY
To find out the position of PNB in Gold coin selling segment among other banks.
1.4.2 SECONDARY
To find out the extra price charge by PNB among the other banks who sell Gold
coins.
1.5 SCOPE OF THE STUDY
i. It indicates the price of Gold coins banks are charging and also their position.
ii. It also pinpoints how much percentage more or less PNB charging for Gold
coins as compare to other banks.
1.6 RESEARCH METHODOLOGY
1.6.1 RESEARCH DESIGN
The research design adopted in this study for secondary data is exploratory and
analytical in nature.
1.7 DATA COLLECTION METHOD
SECONDARY DATA
Secondary data was taken from –
i. Internet
1.8 DATA ANALYSIS TECHNIQUES
Percentage Change in Price Analysis
It is used to describe relationships. It can be used to compare the relative terms, the
distribution of two or more series of data, since the percentage reduces everything to a
common base and thereby to allow meaningful comparison to be made. The formula
is:
5
( Price of per gram – Base rate of per gram ) × 100
Base rate of per gram
6
Chapter 2: Profile of the Company
7
2.1 COMPANY PROFILE
Punjab National Bank is a state-owned commercial bank located in New Delhi. The
Bank is one of the Big Four Banks of India. They offer banking products, and also
operate credit card and debit card business, bullion business, life and non-life
insurance business, and gold coins and asset management business. They are
recognized as the Bank offering highest levels of customer satisfaction in Delhi and
Chennai. The Bank has the largest domestic network of 4997 offices, including 46
extension counters among Nationalized Banks. All their branches offer Core/
Centralized Banking Solution (CBS) along with a variety of financial products
catering to different market segments. They has international presence in 9 countries,
with a branch at Kabul, 2 branches in Hong Kong, representative offices at Almaty,
Dubai, Shanghai and Oslo, a wholly owned subsidiary in UK (with 5 branches), and a
joint venture with Everest Bank Ltd, Nepal. Punjab National Bank was incorporated
in the year 1895 at Lahore, undivided India. Among the inspired founders were
SardarDayal Singh Majithia, LalaHarKishenLal, LalaLalchand, Shri Kali Prosanna
Roy, Shri E.C. Jessawala, ShriPrabhuDayal, BakshiJaishi Ram, LalaDholanDass. The
Bank has the distinction of being the first Indian bank to have been started solely with
Indian capital. In the year 1940, the Bank absorbed BhagwanDass Bank, a scheduled
bank located in Delhi circle. In the year 1951, they acquired the 39 branches of Bharat
Bank and in the year 1961, they acquired Universal Bank of India. Punjab National
Bank was nationalized in July 1969 along with 13 other banks. In the year 1986, they
acquired Hindustan Commercial, which added Hindustan's 142 branches to the Bank's
network. In the year 1993, they acquired New Bank of India which the GOI. During
the year 1996, they developed a packaged for corporate customers for fast remittance
of funds from different up-country branches. In the year, they set up a representative
office in Almaty, Kazakhstan. In the year 2000, the Bank has introduced a scheme for
providing finance against mortgage of immovable property. In September 2000, they
commenced their gold business in the form of Gold Import Scheme. In November
2000, they launched an International Co-branded Credit Card of Punjab National
Bank and Hongkong& Shanghai Banking Corporation (HSBC) in New Delhi. In
March 2002, the Bank came out with their first Initial public offer (IPO) for
5,30,60,700 equity shares of Rs. 10 each which resulted in the reduction of the
government's shareholding in the Bank. During the year 2002, they started their
8
branch in M.G. Road, Bangalore named as Mid-Corporate Branch (MCD) to provide
their corporate clients with a credit limit of Rs. 3.5 crore and above. They made joint
venture with Infosys for the implementation of a Centralized Banking Solution for
them. Also, they made a tie up with Cisco Systems for networking 3,870 branches as
part of their Rs. 150 crore plan. In the year 2003, the Bank took over Kozhikode-
based Nedungadi Bank Ltd (NBL). The Bank entered into an alliance with New India
Assurance for selling their general insurance products. Also, they opened a
representative office in London. During the year, PNB Capital Service Ltd was
amalgamated with the Bank. In June 2003, the Bank entered into anMoU with
Principal Financial Services Inc (USA) and Vijaya Bank for joint venture partnership
in Life Insurance, Pensions and Asset Managements (MF) business. Also, they
formed a strategic alliance with Infrastructure Leasing and Financial Services Ltd
(IL&FS) for setting up a private equity fund for investing in domestic companies. In
the year 2004, the Bank acquired the assets of Hindustan Transmission Product Ltd.
They signed a corporate agency agreement with Export Credit Guarantee Corporation
of India Ltd (ECGC) for marketing ECGC's export credit insurance products through
the network of the bank's branches. Also, anMoU was signed with Intel for the
deployment of various IT-related solutions. During the year, the Bank signed anMoU
with ICICI Bank for ATM network sharing. They awarded a project to Tata
Consultancy Services (TCS) for implement human capital management and payroll
solution. They established a branch office in Kabul, Afghanistan. Also, they opened a
representative office in Shanghai. The bank established an alliance with Everest Bank
in Nepal that permits migrants to transfer funds easily between India and Everest
Bank's 12 branches in Nepal. In the year 2005, the Bank unveiled ATM at Edappal.
Also, they opened a representative office in Dubai. In the year 2006, the Bank made a
tie up with MasterCard International to launch a signature-based debit card. Also, they
made a tie up with Indian Airlines for online booking of air tickets. They opened a
new branch in Uttarakhand. In October 2007, the Bank entered into MoU with India
Infrastructure Finance Company with an aim to extend their cooperation and support
to IIFC in areas of creating a deal flow of infrastructure projects. In January 2008, the
Bank commenced commercial banking operations in Hong Kong. During the year
2008-09, the Bank opened 168 branches, out of which 90 are new branches and 78
branches was added through upgradation of Extension Counters. They made
collaboration with LIC for selling insurance policies and also made a toe up with
9
Oriental Insurance for selling non-life policies on a referral basis. In June 2008, they
entered into anMoU with ILFS Cluster Development Initiative Ltd for providing
finance for various industrial infrastructure projects in the country. In September
2008, they signed aMoU with SMC Global Securities Ltd and Networth Stock
Broking Ltd for providing online trading facility to Company's customers. They
offered a unique '3 in 1 account' comprising of Saving, Demat and Trading account.
In February 2009, they commercially launched their credit cards with 2 types of
consumer credit cards, namely Gold and Classic. Also, they entered into an agreement
with Oriental Insurance Company to market insurance products, a practice also known
as bancassurance. In March 2009, the Bank entered into an understanding with Tata
Motors for financing entire range of passenger cars. Also, they executed an agreement
with The Life Insurance Corporation of India for bancassurance, life insurance under
the provisions of IRDA's Referral Arrangement. During the year 2009-10, the Bank
opened 524 domestic branches, out of which 347 are at new locations while 177
branches was added through upgradation of existing Extension Counters. They
deployed 1400 ATMs taking the the total count of ATMs to more than 3500 Nos.
They opened two overseas branches 1 in Hong Kong and another at DIFC Dubai and
started a JV banking subsidiary 'DRUK PNB Bank Ltd' in Bhutan. Also, they opened
a representative office in Oslo, Norway. During the year, the Bank sold 6.5% of their
stake in UTI Assets Management Co Ltd and UTI Trustee Pvt Ltd, thus bringing
down their stake in both these companies to 18.5%. They launched Corporate Credit
Card with Individual liability. Also they launched Merchant Acquiring Business
through installation of Point of Sale (PoS) Terminals at Merchant Establishments and
Internet Payment Gateway by integrating through Merchant Website, with Brand
Name PNB Biz. In May 2009, the Bank incorporated a subsidiary company namely
PNB Investment Services Ltd. In November 2009, they entered into an agreement
with FIM Bank (Malta), Banca IFIS, Italy and Blend Financial Services Ltd, Mumbai
for setting up a joint venture company for providing factoring, forfeiting and trade
finance related business. During the year 2010-11, the Bank introduced new set of
prodcts and services such as PNB Uphaar, PNB Suvidha and World Travel Card. In
December 13, 2010, they acquired 63.64% stake in JSC Dana Bank of Kazakhstan. In
January 12, 2011, the Bank's joint venture India factoring and Finance Solutions Pvt
Ltd started its commercial operations from Delhi, Mumbai & Chennai. The total
number of branches at the end of March 2011 rose to 5189. The branch network
10
comprises 2047 Rural, 1154 Semi Urban, 1111 Urban and 877 Metropolitan branches.
During the review period 210 domestic branches were opened. With 5189 branches,
including 28 Extension Counters, the Bank has the largest network amongst the
nationalized banks. As part of customer segmentation, Bank has opened specialized
Branches that include 6 Micro Finance branches, 59 SME branches, 11 International
Banking Branches, 17 Asset Recovery Management Branches, 13 Mid Corporate
Branches, 11 Large Corporate Branches, 73 Retail Asset Branches, 11 Agriculture
Finance Branches, 3 high-tech agriculture branches, 1 Capital Market Services Branch
and 1 International Service Branch. Besides, 41 Back Offices, 2 Special Foreign
Exchange Offices, 17 Special MICR Centres, 41 Service (Regional Clearing Centre)
centres, 4 Financial Inclusion Service Centres, 3 Centralised Draft Payable Centres, 1
Central Clearing Service Centre and 1 Depository Back Office are established to
reduce delivery time and improve response time. The Bank received permission from
RBI for setting up a representative office in Sydney, Australia. Also, they are in the
process of entering into Canada. The company is having an aim to increase the
customer base to 150 million by the year 2013. In July 2011, Punjab National Bank
agreed to pick up a 30% stake in MetLife India which will make it the single largest
shareholder in the private insurance company. The two parties have finalized the deal
in July, 2010 and the company renamed as PNB MetLife India.
2.2 COMPANY’S VISION & MISSION
2.2(A) VISION
“To be a Leading Global Bank with Pan India footprints and become a household
brand in the Indo-Gangetic Plains providing entire range of financial products and
services under one roof”
2.2(B) MISSION
“Banking for the unbanked”
11
2.3 PRODUCTS AND SERVICES
PNB integrated all their product & services in “SMILE”.
‘S’ – SME (Small and Medium Enterprise) & PSLB (Priority Sector and Lead Bank)
Products
‘M’ – Mutual Fund & Third Party Products
i. Mutual Fund
ii. Gold Coin Business
iii. Depository Operations
iv. PNB Insurance Policy
‘I’ – Information Technology Products
i. Debit Card
ii. ATM Card
iii. Credit Card
iv. PNB Uphaar Card
v. PNB Suvidha Card
vi. Internet Banking Services
vii. Mobile Banking Services
viii. World Travel Card
‘L’ – Liability Products
i. PNB Mitra – Savings Fund A/C For Financial Inclusion
ii. PNB Smart Banking Current Account
iii. PNB Prudent Sweep
iv. PNB Total Freedom salary Account
v. PNB Floating Rate Fixed Deposit Scheme
vi. Senior Citizen Savings Scheme, 2004
vii. Tax-Saver Deposit Scheme
viii. PNB Vidyarthi Saving Fund Account
ix. PNB Bulk Fixed Deposit Scheme
12
x. Mobile Linked Notice Deposit Scheme
xi. PNB Flexi RD Scheme
xii. Recurring Deposit Scheme
xiii. Capital Gains Account Scheme, 1988
xiv. BalikaShiksha Fixed Deposit Scheme
‘E’ – Earning Products
2.4 SUBSIDIARIES OF PUNJAB NATIONAL BANK
i. PNB Gilts
ii. PNB Housing Finance
iii. PNB Investment Services
iv. PNB Insurance Broking
v. PNB Life Insurance Co.
2.5 JOINT VENTURES OF PUNJAB NATIONAL BANK
i. Principal PNB Asset Management Company
ii. Principal Trustee Company
iii. Assets Care Enterprises
iv. India Factoring & Finance Solutions
2.6 BOARD OF DIRECTORS
Chairman & Managing Director K.R.Kamath
Director (Workman Employee) Mohinder Paul Singh
Director (Officer Employee) Pradeep Kumar
Nominee (RBI) Jasbir Singh
Executive Director RakeshSethi
Director(PartTimeNonOfficial) MushtaqAtaullahAntulay
Executive Director UshaAnanthasubramanian
Nominee (Govt) Anurag Jain
Director(PartTimeNonOfficial) B.B.Chaudhry
Company Secretary A.Gopinathan
Director (Shareholder) M.N.Gopinath
13
D.K.Singla
Sunil Gupta
Executive Director Sadhu Ram Bansa
2.7 AWARDS :
i. National Award for Excellence in SSI Lending- Ranked 2nd for four
consecutive years from 2002 to 2005.
ii. The Banker, London- Ranked 386 amongst Top 1000 Global Banks in July
2005.
iii. Golden Peacock Award- for excellence in corporate governance in 2005.
iv. The Banker's Almanac - Ranked 3rd amongst banking sector in India and
323rd rank in the world in 2006.
v. AC Nielson Survey - 9th amongst Top 50 Most Trusted Services Brands in
India.
vi. PNB Awarded Best Technology Bank 2010.
vii. PNB Bagged Golden Peacock National Training Award 2011.
viii. PNB bags Most Socially Responsive Bank Award 2011.
ix. PNB receives Best Bank Award 2011.
x. PNB Awarded Golden Peacock HR Excellence Award 2011.
xi. PNB Awarded SKOCH Challenger Award 2011 on Financial Inclusion.
xii. PNB Awarded “Overall Best Corporate Social Responsibility” Awards 2012.
xiii. PNB Awarded SKOCH Award on Financial Inclusion 2012.
14
Chapter 3: Data Analysis, Interpretation and
Results
15
Gold Coin rates for 1 day of Banks:
Comparison of Dated :22-03-2013 Gold Coin Rates of Banks
Sl.
No.
Name of the
Bank
Coin Size (in Grams)
2 4 5 8 10 20 50 100
1 Allahabad Bank 6571 12769 15805 25208 31233 62274 x x
2 Andhra Bank 6484 12615 15685 24963 31197 61918 153916 x
3 Bank of Baroda 6497 12773 15916 25335 31622 62981 156520 x
4 Bank of India x 12679 15815 25079 31397 62209 153225 x
5Central Bank of
India6482 12672 15797 x 31381 x x x
6 Corporation Bank 6611 12584 15800 25151 x 61960 153062 300593
7Indian overseas
Bank6414 12579 x 24957 31248 61927 153139 304715
8Oriental Bank of
Com.x x 15850 25335 31536 x x x
9Punjab National
Bank6708 x 16511 26040 32628 64903 x x
10Punjab & Sind
Bankx x 15900 25535 31790 63320 x x
11SBI/SBM/SBT/
SBOP6361 12551 15646 24931 31121 61692 153558 x
12State Bank of
Hyderabad6549 12756 x 25122 31390 62308 154969 x
13Union Bank of
India6486 x 15890 25425 31731 63262 158655 x
14 Federal Bank 6805 x 16445 25820 x 64754 161222 321684
15 HDFC Bank x x 17401 x 34468 68633 171010 341707
16 IndusInd Bank x x 16802 x 33381 x 165232 x
17 Kotak Mahindra x x 17191 27467 x 68377 170317 340103
16
The prices quoted by various banks are exclusive of VAT and other local taxes
except that of HDFC Bank. Corporation Bank sells Gold Coins of 2 gms to 50
gms with 999.9 purity and 100 gms bar with 999.0 purity.
Analysis:
From above Gold rate chart we observe that SBI offers lowest price in 2gm, 4gm,
5gm, 8gm, 10gm and 20gm Gold coin categories. But IOB offers lowest price in
50gm Gold coin category and Corporation Bank offers lowest price in 100gm Gold
coin category.
Before buying Gold coins, investors will analysis from where they can find cheaper
rate. So, we have to look where PNB stands in terms of giving Gold coins in cheaper
rate.
As SBI offers lowest price in 2gm, 4gm, 5gm, 8gm, 10gm and 20gm Gold coin
categories, we will take SBI rates as the base rate. And for 50gm and 100gm category
we will take IOB and Corporation Bank’s rate as base rate.
For ‘percentage difference in price’ formulae is ----------------
( Price of per gram Gold – Base rate of per gram Gold ) × 100
Base rate of per gram Gold
17
For 2gm:
SBI gold coin rate for 2gm = Rs.6361
VAT @1% of 6361 = Rs.63.61
Total = Rs.6424.61
Rate per gram = Rs.3212.305
Name of
the Bank
Gold
coin
rate of
2gm(a)
(Rs.)
VAT
@1%
(b = a +
1% of
a)
(Rs.)
Discount
percentage
given by
Bank
(Rs.)
Rate
after
discount
if any
(c = b -
discount
% of b)
(Rs.)
Gold coin
rate per
gram
(d=c/2)
(Rs.)
Gold
coin rate
of SBI
per
gram(e)
(Rs.)
Percentage
difference in
price
( d-e )×100
e
Allahabad
Bank
6571 6636.71 x 3318.35
5
3318.355 3212.30
5
3.30%
Andhra
Bank
6484 6548.84 x 3274.42 3274.42 3212.30
5
1.93%
Bank of
Baroda
6497 6561.97 1% 6496.35 3248.18 3212.30
5
1.11%
Bank of
India
x x x x x 3212.30
5
x
Central
Bank of
India
6482 6546.82 x 6546.82 3273.41 3212.30
5
1.90%
Corporatio
n Bank
6611 6677.11 x 6677.11 3338.555 3212.30
5
3.93%
Indian
overseas
Bank
6414 6478.14 x 6478.14 3239.07 3212.30
5
0.83%
Oriental x x x x x 3212.30 x
18
Bank of
Com.
5
Punjab
National
Bank
6708 6775.08 Up to 5
coins-5%
6436.32
6
3218.163 3212.30
5
0.18%
Above 6
coins-6%
6368.57
5
3184.288 -0.87%
Punjab &
Sind Bank
x x x x x 3212.30
5
x
SBI/
SBM/
SBT/
SBOP
6361 6424.61 x 6424.61 3212.305 3212.30
5
0%
State
Bank of
Hyderaba
d
6549 6614.49 x 6614.49 3307.245 3212.30
5
2.96%
Union
Bank of
India
6486 6550.86 x 6550.86 3275.43 3212.30
5
1.97%
Federal
Bank
6805 6873.05 4% 6598.12
8
3299.064 3212.30
5
2.70%
HDFC
Bank
x x x x x 3212.30
5
x
IndusInd
Bank
x x x x x 3212.30
5
x
Kotak
Mahindra
x x x x x 3212.30
5
x
Inference
As per the analysis we have seen that ‘the percentage difference in price’ between SBI
and PNB is very narrow. Up to 5 coins, PNB charges 0.18% (per gram) higher than
SBI. But above 6 coins, PNB charges 0.87% (per gram) less than SBI.
For 4gm:
19
SBI gold coin rate for 4gm = Rs.12551
VAT @1% of 12551 = Rs.125.51
Total = Rs.12676.51
Rate per gram = Rs.3169.13
Name of
the Bank
Gold
coin
rate of
4gm(a)
(Rs.)
VAT
@1%
(b = a +
1% of
a)
(Rs.)
Discount
percentage
given by
Bank
(Rs.)
Rate
after
discount
if any
(c = b -
discount
% of b)
(Rs.)
Gold coin
rate per
gram
(d=c/2)
(Rs.)
Gold
coin rate
of SBI
per
gram(e)
(Rs.)
Percentage
difference in
price
( d-e )×100
e
Allahabad
Bank
12769 12896.6
9
x 12896.6
9
3224.17 3169.13 1.74%
Andhra
Bank
12615 12741.1
5
x 12741.1
5
3185.29 3169.13 0.51%
Bank of
Baroda
12773 12900.7
3
1% 12771.7
2
3192.93 3169.13 0.75%
Bank of
India
12679 12805.7
9
x 12805.7
9
3201.48 3169.13 1.02%
Central
Bank of
India
12672 12798.7
2
x 12798.7
2
3199.68 3169.13 0.96%
Corporatio
n Bank
12584 12709.8
4
x 12709.8
4
3177.46 3169.13 0.26%
Indian
overseas
Bank
12579 12704.7
9
x 12704.7
9
3176.20 3169.13 0.22%
Oriental
Bank of
x x x x x 3169.13 x
20
Com.
Punjab
National
Bank
x x x x x 3169.13 x
Punjab &
Sind Bank
x x x x x 3169.13 x
SBI/
SBM/
SBT/
SBOP
12551 12676.5
1
x 12676.5
1
3169.13 3169.13 0%
State
Bank of
Hyderaba
d
12756 12883.5
6
x 12883.5
6
3220.89 3169.13 1.63%
Union
Bank of
India
x x x x x 3169.13 x
Federal
Bank
x x x x x 3169.13 x
HDFC
Bank
x x x x x 3169.13 x
IndusInd
Bank
x x x x x 3169.13 x
Kotak
Mahindra
x x x x x 3169.13 x
Inference
PNB does not sell 4gm. Gold coins. As per the analysis we have seen that ‘the
percentage difference in price’ between SBI and other banks is very narrow. SBI sell
Gold coins in cheapest rate.
For 5gm:
21
SBI gold coin rate for 5gm = Rs.15646
VAT @1% of 12551 = Rs.156.46
Total = Rs.15802.46
Rate per gram = Rs.3160.49
Name of
the Bank
Gold
coin
rate of
5gm(a)
(Rs.)
VAT
@1%
(b = a +
1% of
a)
(Rs.)
Discount
percentage
given by
Bank
(Rs.)
Rate
after
discount
if any
(c = b -
discount
% of b)
(Rs.)
Gold coin
rate per
gram
(d=c/2)
(Rs.)
Gold
coin rate
of SBI
per
gram(e)
(Rs.)
Percentage
difference in
price
( d-e )×100
e
Allahabad
Bank
15805 15963.0
5
x 15963.0
5
3192.61 3160.49 1.02%
Andhra
Bank
15685 15841.8
5
x 15841.8
5
3168.37 3160.49 0.25%
Bank of
Baroda
15916 16075.1
6
1% 15914.4
1
3182.88 3160.49 0.71%
Bank of
India
15815 15973.1
5
x 15973.1
5
3194.63 3160.49 1.08%
Central
Bank of
India
15797 15954.9
7
x 15954.9
7
3190.95 3160.49 0.96%
Corporatio
n Bank
15800 15958 x 15958 3191.60 3160.49 0.98%
Indian
overseas
Bank
x x x x x 3160.49 x
22
Oriental
Bank of
Com.
15850 16008.5 Up to 3
gold
coins-3%
15528.2
5
3105.65 3160.49 -1.74%
4-9 Gold
Coins-4%
15368.1
6
3073.63 -2.75%
Above 9
Gold
coins-5%
15208.0
8
3041.62 -3.76%
Punjab
National
Bank
16511 16676.1
1
Up to 5
Gold
coins-3%
16175.8
3
3235.17 3160.49 2.36%
Above 5
Gold
coins-4%
16009.0
7
3201.81 1.31%
Punjab &
Sind Bank
15900 16059 Up to 3
Gold
coins-3%
15577.2
3
3115.45 3160.49 -1.43%
4-9 Gold
Coins-4%
15416.6
4
3083.33 -2.44%
10-49
Gold
coins-5%
15256.0
5
3051.21 -3.46%
Above 49
Gold
coins-6%
15095.4
6
3019.09 -4.47%
SBI/
SBM/
SBT/
SBOP
15646 15802.4
6
x 15802.4
6
3160.49 3160.49 0%
23
State
Bank of
Hyderaba
d
x x x x x 3160.49 x
Union
Bank of
India
15890 16048.9 x 16048.9 3209.78 3160.49 1.56%
Federal
Bank
16445 16609.4
5
x 16609.4
5
3321.89 3160.49 5.11%
HDFC
Bank
X 17401 x 17401 3480.2 3160.49 10.12%
IndusInd
Bank
16802 16970.0
2
x 16970.0
2
3394 3160.49 7.39%
Kotak
Mahindra
17191 17362.9
1
x 17362.9
1
3472.58 3160.49 9.87%
Inference
As per the analysis we have seen that ‘the percentage difference in price’ between SBI
and PNB is very much wide. Up to 5 coins, PNB charges 2.36% (per gram) higher
than SBI. But above 6 coins, PNB charges 1.31% (per gram) higher than SBI. In this
segment OBC and P&SB have occupied the top most position.
24
For 8gm:
SBI gold coin rate for 8gm = Rs.24931
VAT @1% of 12551 = Rs.249.31
Total = Rs.25180.31
Rate per gram = Rs.3147.54
Name of
the Bank
Gold
coin
rate of
8gm(a)
(Rs.)
VAT
@1%
(b = a +
1% of
a)
(Rs.)
Discount
percentage
given by
Bank
(Rs.)
Rate
after
discount
if any
(c = b -
discount
% of b)
(Rs.)
Gold coin
rate per
gram
(d=c/2)
(Rs.)
Gold
coin rate
of SBI
per
gram(e)
(Rs.)
Percentage
difference in
price
( d-e )×100
e
Allahabad
Bank
25208 25460.0
8
x 25460.0
8
3182.51 3147.54 1.11%
Andhra
Bank
24963 25212.6
3
x 25212.6
3
3151.58 3147.54 0.12%
Bank of
Baroda
25335 25388.3
5
1% 25134.4
7
3141.81 3147.54 -0.00003%
Bank of
India
25079 25329.7
9
x 25329.7
9
3166.22 3147.54 0.59%
Central
Bank of
India
x x x x x 3147.54 x
Corporatio 25151 25402.5 x 25402.5 3175.31 3147.54 0.80%
25
n Bank 1 1
Indian
overseas
Bank
24957 25206.5
7
x 25206.5
7
3150.82 3147.54 0.10%
Oriental
Bank of
Com.
25335 25588.3
5
up to 3
gold
coins-3%
24820.7
0
3102.59 3147.54 -1.43%
4-9 gold
coins-4%
24564.8
2
3070.60 -2.45%
above 9
gold
coins-5%
24308.9
3
3038.62 -3.46%
Punjab
National
Bank
26040 26300.4
0
up to 5
gold
coins-3%
24985.3
8
3123.17 3147.54 -0.77%
above 5
gold
coins-4%
24722.3
8
3090.30 -1.82%
Punjab &
Sind Bank
25535 25790.3
5
up to 3
gold
coins-3%
25016.6
4
3127.08 3147.54 -0.65%
4-9 gold
coins-4%
24758.7
4
3094.84 -1.67%
10-49
gold
coins-5%
24500.8
3
3062.60 -2.70%
above 49
gold
coins-6%
24242.9
3
3030.37 -3.72%
SBI/
SBM/
SBT/
SBOP
24931 25180.3
1
x 25180.3
1
3147.54 3147.54 0%
26
State
Bank of
Hyderaba
d
25122 25373.2
2
x 25373.2
2
3171.65 3147.54 0.76%
Union
Bank of
India
25425 25679.2
5
x 25679.2
5
3209.91 3147.54 1.98%
Federal
Bank
25820 26078.2
0
4% 25035.0
7
3129.38 3147.54 -0.58%
HDFC
Bank
x x x x x 3147.54 x
IndusInd
Bank
x x x x x 3147.54 x
Kotak
Mahindra
27467 27741.6
7
x 27741.6
7
3467.71 3147.54 10.17%
Inference
As per the analysis we have seen that ‘the percentage difference in price’ between SBI
and PNB is very narrow. Up to 5 coins, PNB charges 0.77% (per gram) less than SBI.
But above 6 coins, PNB also charges 1.82% (per gram) less than SBI.Though OBC
occupied the top most position among others.
27
For 10gm:
SBI gold coin rate for 10gm = Rs.31121
VAT @1% of 31121 = Rs.3112.10
Total = Rs.31432.21
Rate per gram = Rs.3143.22
Name of
the Bank
Gold
coin
rate of
10gm
(a)
(Rs.)
VAT
@1%
(b = a +
1% of
a)
(Rs.)
Discount
percentage
given by
Bank
(Rs.)
Rate
after
discount
if any
(c = b -
discount
% of b)
(Rs.)
Gold coin
rate per
gram
(d=c/2)
(Rs.)
Gold
coin rate
of SBI
per
gram(e)
(Rs.)
Percentage
difference in
price
( d-e )×100
e
Allahabad
Bank
31233 31545.3
3
x 31545.3
3
3154.53 3143.22 0.36%
Andhra
Bank
31197 31508.9
7
x 31508.9
7
3150.90 3143.22 0.24%
Bank of
Baroda
31622 31938.2
2
1% 31618.8
4
3161.88 3143.22 0.59%
Bank of
India
31397 31710.9
7
x 31710.9
7
3171.10 3143.22 0.89%
Central
Bank of
India
31381 31694.8
1
x 31694.8
1
3169.48 3143.22 0.84%
Corporatio x x x x x 3143.22 x
28
n Bank
Indian
overseas
Bank
31248 31560.4
8
x 31560.4
8
3156.05 3143.22 0.41%
Oriental
Bank of
Com.
31536 31851.3
6
up to 3
gold
coins-3%
30895.8
2
3089.58 3143.22 -1.71%
4-9 gold
coins-4%
30577.3
1
3057.73 -2.72%
above 9
gold
coins-5%
30258.7
9
3025.88 -3.73%
Punjab
National
Bank
32628 32954.2
8
up to 5
gold
coins-3%
31965.6
5
3196.57 3143.22 1.70%
above 5
gold
coins-4%
31636.1
1
3163.61 0.65%
Punjab &
Sind Bank
31790 32107.9
0
up to 3
gold
coins-3%
31144.6
6
3114.47 3143.22 -0.92%
4-9 gold
coins-4%
30823.5
8
3082.36 -1.92%
10-49
gold
coins-5%
30502.5
1
3050.25 -2.96%
above 49
gold
coins-6%
30181.4
3
3018.14 -3.98%
SBI/
SBM/
SBT/
SBOP
31121 31432.2
1
x 31432.2
1
3143.22 3143.22 0%
29
State
Bank of
Hyderaba
d
31390 31703.9
0
x 31703.9
0
3170.39 3143.22 0.86%
Union
Bank of
India
31731 32048.3
1
x 32048.3
1
3204.83 3143.22 1.96%
Federal
Bank
x x x x x 3143.22 x
HDFC
Bank
x 34468 x 34468 3446.80 3143.22 9.66%
IndusInd
Bank
33381 33714.8
1
x 33714.8
1
3371.48 3143.22 7.26%
Kotak
Mahindra
x x x x x 3143.22 x
Inference
As per the analysis we have seen that ‘the percentage difference in price’ between SBI
and PNB is very narrow. Up to 5 coins, PNB charges 1.70% (per gram) higher than
SBI. But above 6 coins, PNB charges 0.65% (per gram) higher than SBI. In this
segment also OBC and P&SB occupied the top positions among others.
30
For 20gm:
SBI gold coin rate for 20gm = Rs.61692
VAT @1% of 61692 = Rs.616.92
Total = Rs.62308.92
Rate per gram = Rs.3115.45
Name of
the Bank
Gold
coin
rate of
20gm
(a)
(Rs.)
VAT
@1%
(b = a +
1% of
a)
(Rs.)
Discount
percentage
given by
Bank
(Rs.)
Rate
after
discount
if any
(c = b -
discount
% of b)
(Rs.)
Gold coin
rate per
gram
(d=c/2)
(Rs.)
Gold
coin rate
of SBI
per
gram(e)
(Rs.)
Percentage
difference in
price
( d-e )×100
e
Allahabad
Bank
62274 62896.7
4
x 62896.7
4
3144.84 3115.45 0.94%
Andhra
Bank
61918 62537.1
8
x 62537.1
8
3126.86 3115.45 0.37%
Bank of
Baroda
62981 63610.8
1
1% 62974.7
0
3148.74 3115.45 1.07%
Bank of
India
62209 62831.0
9
x 62831.0
9
3141.55 3115.45 0.84%
Central
Bank of
India
x x x x x 3115.45 x
Corporatio 61960 62579.6 x 62579.6 3128.98 3115.45 0.43%
31
n Bank 0 0
Indian
overseas
Bank
61927 62546.2
7
x 62546.2
7
3127.31 3115.45 0.38%
Oriental
Bank of
Com
x x x x x 3115.45 x
Punjab
National
Bank
64903 65552.0
3
up to 5
gold
coins-3%
63585.4
7
3179.27 3115.45 2.05%
above 5
gold
coins-4%
62929.9
5
3146.50 1%
Punjab &
Sind Bank
63320 63953.2 up to 3
gold
coins-3%
62034.6
0
3101.73 3115.45 -0.44%
4-9 gold
coins-4%
61395.0
7
3069.75 -1.47%
10-49
gold
coins-5%
60755.5
4
3037.78 -2.49%
above 49
gold
coins-6%
60116.0
1
3005.80 -3.52%
SBI/
SBM/
SBT/
SBOP
61692 62308.9
2
x 62308.9
2
3115.45 3115.45 0%
State
Bank of
Hyderaba
d
62308 62931.0
8
x 62931.0
8
3146.55 3115.45 1%
32
Union
Bank of
India
63262 63894.6
2
x 63894.6
2
3194.73 3115.45 2.54%
Federal
Bank
64754 65401.5
4
4% 62785.4
8
3139.27 3115.45 0.76%
HDFC
Bank
x 68633 x 68633 3431.65 3115.45 10.15%
IndusInd
Bank
x x x x x 3115.45 x
Kotak
Mahindra
68377 69060.7
7
x 69060.7
7
3453.04 3115.45 10.84%
Inference
As per the analysis we have seen that ‘the percentage difference in price’ between SBI
and PNB is very wide. Up to 5 coins, PNB charges 2.05% (per gram) higher than SBI.
But above 6 coins, PNB charges 1% (per gram) higher than SBI. In this segment
P&SB charge fewer prices among others.
33
Chapter 4: Findings, Conclusion and
Recommendations
34
4.1 FINDINGS
i. Into 2gm Gold coin segment, up to 5 coins, PNB charges 0.18% (per gram)
higher than SBI. But above 6 coins, PNB charges 0.87% (per gram) less than
SBI.
ii. Into 5gm Gold coin segment, up to 5 coins, PNB charges 2.36% (per gram)
higher than SBI. But above 6 coins, PNB charges 1.31% (per gram) higher
than SBI. In this segment OBC and P&SB have occupied the top most position
as per the analysis.
iii. Into 8gm Gold coin segment, up to 5 coins, PNB charges 0.77% (per gram)
less than SBI. But above 6 coins, PNB also charges 1.82% (per gram) less
than SBI. Though OBC occupied the top most position among others.
iv. Into 10gm Gold coin segment, up to 5 coins, PNB charges 1.70% (per gram)
higher than SBI. But above 6 coins, PNB charges 0.65% (per gram) higher
than SBI. In this segment also OBC and P&SB occupied the top positions
among others.
v. Into 20gm Gold coin segment, up to 5 coins, PNB charges 2.05% (per gram)
higher than SBI. But above 6 coins, PNB charges 1% (per gram) higher than
SBI. In this segment P&SB charge lowest price among others.
4.2 CONCLUSION
In Gold coin segment PNB have a very well position as per the analysis. If they can
give more 1 or 2% discount then PNB can find the top position among the other
competitors. Thus customers will more prefer to buy Gold coins from PNB which will
increase PNB’s profitability.
4.3 RECOMMENDATIONS
35
i. For Gold coin if PNB occupy a competitive position. Though if PNB can give
1 or 2% more discount, then PNB can find the no. 1 position in the market
who will offer cheapest price among the other banks. Then they can easily
convince the customers to buy Gold coins from them, not from other banks.
ii. As the Gold consumption in INDIA is highest (source: World Gold Council),
the opportunity to grab customers is huge. As the quality is same, customers
will buy from there where they can find in cheaper rate. If corrective
measurement can be taken then PNB can see a huge profit out of this.
Thus by doing all this, the bank can increase its Fee-based income, Return on assets
as well as the Non-interest income, which leads to much progress of the bank.
36
5.0 Bibliography
Website
i. https://www.pnbindia.in/En/ui/Daily-gold-coin-rates.aspx#GC March 22, 2013
ii. https://www.allahabadbank.in/gold-coin-selling-rates.asp March 22, 2013
iii. http://andhrabank.in/english/goldcoin.aspx March 22, 2013
iv. http://www.bankofbaroda.co.in/gold-new.asp March 22, 2013
v. http://www.bankofindia.co.in/english/View_goldcoin.aspx March 22, 2013
vi. https://www.centralbankofindia.co.in/site/indexcbi.aspx March 22, 2013
vii. http://corpbank.com/asp/corpbank-goldcoins_1165.asp March 22, 2013
viii. https://www.obcindia.co.in/obcnew/site/gold_coins.aspx March 22, 2013
ix. http://www.iob.in/GoldRate.aspx March 22, 2013
x. https://www.sbi.co.in/user.htm?action=goldRates March 22, 2013
xi. https://www.psbindia.com/PSB_SWARAN_MUDRA.php March 22, 2013
xii. http://www.sbhyd.com/online-services/gold-coins/ March 22, 2013
xiii. http://www.unionbankofindia.co.in/personal_insurance_gold_pricing.aspx
March 22, 2013
xiv. http://www.federalbank.co.in/gold-rate March 22, 2013
xv. http://www.indusind.com/indusind/wcms/en/home/rates/gold-rates/
index.html March 22, 2013
xvi. http://www.kotak.com/bank/common/gold_rates.htm March 22, 2013
xvii. http://www.hdfcbank.com/personal/product/productdetails/invest-in-gold-
mudra-pure-gold-bar/gts8mirk March 22, 2013
37