Good old post offices are going for gold —and are in a price war with leading banks.
India Post has tied up with Reliance Money and World Gold Council to sell gold coins through its post office network across the country.
The pilot project has been launched on Wednesday and it will make gold coins available across 100 post offices in four states — Delhi, Maharashtra, Tamil Nadu and Gujarat. However going forward it would be available for sale at all the 155,000 post offices across the country.
“We have initiated the process to commercialise the post offices and increase their visibility,” said A Raja, Union Minister of IT and Telecom. Reliance Money will act as the vendor to provide certified coins that are 99.99 per cent pure in four denominations of 0.5 gm, 1 gm, 5 gm and 8 gm.
The sale of gold through coins account for 10 per cent of total sales of gold in India, however, only three to four per cent is through organised retailing.
“This should go up as we have tied with India Post which is the most trusted organisation and is biggest retail network with 1,55,000 post offices,” said Sudip Bandyopadhyay, chief executive officer, Reliance Money. “We will train the post office employees and we are confident of the delivery channel.”
“The gold sales have been on a rise and gold coins are being made available at lower margins through this channel,” said Ajay Mitra, managing director, India, World Gold Council, “New people are getting into investing in gold and this network will help in reach and penetration.”
At a time when all the asset classes are witnessing erosion in value, gold has emerged as a preferred asset class having an inherent quality of preserving its value.
“In the long term, considering the demand supply economics, gold is only expected to go up, as there are no new gold mines coming up and so the supply remains constrained,” said a gold expert who did not wish to be named.