India Post may include buyback provision in gold retailing plan

India Post is planning to include the provision of buyback into the gold retailing scheme, which offers gold coins to customers through its post offices. Under the retail scheme launched in 2008, over 700 post offices sell gold coins. Till now, over 900 kg of gold have been sold through the post offices to around one lakh customers. In 2010-11 itself 581 kg of gold coins were sold. The Swiss gold coins of 24-carat purity are available in 0.5 gm, one gm, five gm and eight gm denominations. India Post has tied up with Reliance Money Infrastructure for the scheme and World Gold Council is the marketing partner. “The India Post is working out a plan to introduce buyback provision in the scheme,” said Keyur Shah, head of investments, World Gold Council. The absence of buyback arrangement is one of the key issues that restrict the growth of gold coin retailing through banks and post offices. An investor has to approach a jeweller when he has to sell the coin. Jewellers usually deduct higher melting charges for the coins bought from outlets other than their own stores. “Banks need RBI’s permission to introduce the provision. For India Post, however, it is easier if the partnering agencies agree on it,” said Shah. As per the WGC’s gold demand report for the first quarter of 2011, the investment demand for the metal grew by 26 per cent in and the main growth driver was bars and coins.
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