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