India's
efforts to curb demand for gold and its import volume to reduce a record
current account deficit (CAD) seem to have the support of financial services companies.
After Reliance Capital's decision to halt sales of gold-backed funds, it's now HDFC Bank's turn to stop the use of credit card for gold purchases. The second largest private lender has directed its branches not to accept credit cards for gold coin purchases. On Wednesday, it issued a note to jewellery outlets to stop providing easyEMI facilities to customers to prevent speculative investment. "We would like to inform you that as per the bank's internal policy guidelines related to loans for jewellery purchase, we will be discontinuing the easyEMI facility on HDFC Bank credit cards for the purchase of jewellery with immediate effect," the note said.
State Bank of India, India's largest lender, has discontinued selling gold coins on wholesale basis after finance minister P Chidambaram urged banks to stop selling golds as a step to ease the pressure on imports and CAD. "We are going slow on gold coin sales," said Union Bank of IndiaBSE 2.89 % chairman and managing director Debabrata Sarkar. Gold imports have slowed to about $36 million a day from $135 million before the curbs, Chidambaram said last week.
The latest direction by HDFC Bank will prohibit its credit cardholders purchase jewellery on easyEMI at the designated jewellery outlets. They will, however, be able to use their HDFC Bank credit card for normal purchases. The bank did not respond to an ET query what would have triggered the move but a bank official said on the condition of anonymity: "We don't encourage speculative investment." HDFC Bank is planning to de-activate the easyEMI terminal IDs of retail jewellery outlets immediately.
VS Mani, head of administration at Chennai-based 600-crore Prince Jewellery, said: "We introduced this scheme at some three years ago. But suddenly on June 26 HDFC Bank decided to discontinue it. This will obviously affect our business. The scheme was a major draw among our young customers who are HDFC credit cardholders. However, the payment issue will be decided between the bank and the customer and we do not have any role to play." Some jewellers said banks were trying to please Reserve Bank of India, which has just taken a slew of measures to put restrictions on the import of gold. Rajiv Popley, director, Popley & Sons, said: "Purchasing gold by using credit card was gradually becoming popular. But unfortunately, the withdrawal of the scheme will affect this new line of business. Nearly 10% of our business used to come through this route."
http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/hdfc-bank-not-to-accept-credit-cards-for-gold-sale/articleshow/20808326.cms
After Reliance Capital's decision to halt sales of gold-backed funds, it's now HDFC Bank's turn to stop the use of credit card for gold purchases. The second largest private lender has directed its branches not to accept credit cards for gold coin purchases. On Wednesday, it issued a note to jewellery outlets to stop providing easyEMI facilities to customers to prevent speculative investment. "We would like to inform you that as per the bank's internal policy guidelines related to loans for jewellery purchase, we will be discontinuing the easyEMI facility on HDFC Bank credit cards for the purchase of jewellery with immediate effect," the note said.
State Bank of India, India's largest lender, has discontinued selling gold coins on wholesale basis after finance minister P Chidambaram urged banks to stop selling golds as a step to ease the pressure on imports and CAD. "We are going slow on gold coin sales," said Union Bank of IndiaBSE 2.89 % chairman and managing director Debabrata Sarkar. Gold imports have slowed to about $36 million a day from $135 million before the curbs, Chidambaram said last week.
The latest direction by HDFC Bank will prohibit its credit cardholders purchase jewellery on easyEMI at the designated jewellery outlets. They will, however, be able to use their HDFC Bank credit card for normal purchases. The bank did not respond to an ET query what would have triggered the move but a bank official said on the condition of anonymity: "We don't encourage speculative investment." HDFC Bank is planning to de-activate the easyEMI terminal IDs of retail jewellery outlets immediately.
VS Mani, head of administration at Chennai-based 600-crore Prince Jewellery, said: "We introduced this scheme at some three years ago. But suddenly on June 26 HDFC Bank decided to discontinue it. This will obviously affect our business. The scheme was a major draw among our young customers who are HDFC credit cardholders. However, the payment issue will be decided between the bank and the customer and we do not have any role to play." Some jewellers said banks were trying to please Reserve Bank of India, which has just taken a slew of measures to put restrictions on the import of gold. Rajiv Popley, director, Popley & Sons, said: "Purchasing gold by using credit card was gradually becoming popular. But unfortunately, the withdrawal of the scheme will affect this new line of business. Nearly 10% of our business used to come through this route."
http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/hdfc-bank-not-to-accept-credit-cards-for-gold-sale/articleshow/20808326.cms
Nice post...I have gone through your blog. The information you have given are really informative.
ReplyDeleteJewellers in Panchkula
You can now purchasegold jewellery on easy emi from online store. Some online web store offers 0 % monthly interest.This is a good option especially for the younger once who are not able to spend a money at a one time.
ReplyDelete