Chapter 1: Introduction, Research Methodology & Design

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. Dont 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/ Fineness

Coin Size (in gms)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Allahabad Bank Andhra Bank Bank of Baroda Bank of India Canara Bank Central Bank of India Corporation Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab National Bank Punjab & Sind Bank SBI/ SBM/ SBT/ SBOP State Bank of Hyderabad Syndicate Bank

999.9 2, 4, 5, 8, 10, 20 999.9 2, 4, 5, 8, 10, 20,50 999.9 2, 4, 5, 8, 10, 20, 50 999.9 4, 5, 8, 10, 20, 50 999.9 8, 10 999.9 2, 4, 5, 10 999.9 2, 4, 5, 8, 20, 50, 100 999.9 2, 4, 5, 8, 10, 20, 50 999.9 2, 4, 8, 10, 20, 50, 100 999.9 5, 8, 10 999.9 2, 5, 8,10, 20 999.9 5, 8, 10, 20 999.9 2, 4, 5, 8, 10, 20, 50, 100 999.9 2, 4, 8, 10, 20 999.9 4, 8, 10, 20, 50

16 17 18 19 20 21 22 23 24 25

Union Bank of India AXIS Bank Dhanlaxmi Bank Federal Bank HDFC Bank ICICI Bank IndusInd Bank KarurVysya Bank Kotak Mahindra South Indian Bank

999.9 2, 5, 8, 10, 20, 50 99.99% 5, 8, 10, 20, 50 99.99% 5, 10 999.9 1, 2, 5, 8, 20, 50, 100 99.99% 2.5, 5, 10, 20, 50, 100 99.99% 0.5, 1, 2.5, 5, 8, 10, 20, 50 99.99% 5, 10, 50 99.99% 4, 8, 10, 20, 50, 100 99.99% 5, 8, 20, 50, 100 99.99% 4, 8, 20, 50, 100

Fig. 1.2 DISCOUNTS GIVEN BY BANKS BOB OBC 1 % discount available to existing customers/Bulk purchasers. 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.

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. ii. It indicates the price of Gold coins banks are charging and also their position. 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:

Price of per gram Base rate of per gram Base rate of per gram

) 100

Chapter 2: Profile of the Company

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 Kozhikodebased 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 COMPANYS 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. ii. iii. iv.

Mutual Fund Gold Coin Business Depository Operations PNB Insurance Policy

I Information Technology Products

i. ii. iii. iv. v. vi. vii. viii.

Debit Card ATM Card Credit Card PNB Uphaar Card PNB Suvidha Card Internet Banking Services Mobile Banking Services World Travel Card

L Liability Products
i. ii. iii. iv. v. vi. vii. viii. ix.

PNB Mitra Savings Fund A/C For Financial Inclusion PNB Smart Banking Current Account PNB Prudent Sweep PNB Total Freedom salary Account PNB Floating Rate Fixed Deposit Scheme Senior Citizen Savings Scheme, 2004 Tax-Saver Deposit Scheme PNB Vidyarthi Saving Fund Account PNB Bulk Fixed Deposit Scheme
12

x. xi. xii. xiii. xiv.

Mobile Linked Notice Deposit Scheme PNB Flexi RD Scheme Recurring Deposit Scheme Capital Gains Account Scheme, 1988 BalikaShiksha Fixed Deposit Scheme

E Earning Products 2.4 SUBSIDIARIES OF PUNJAB NATIONAL BANK

i. ii. iii. iv. v.

PNB Gilts PNB Housing Finance PNB Investment Services PNB Insurance Broking PNB Life Insurance Co.

2.5 JOINT VENTURES OF PUNJAB NATIONAL BANK

i. ii. iii. iv.

Principal PNB Asset Management Company Principal Trustee Company Assets Care Enterprises India Factoring & Finance Solutions

2.6 BOARD OF DIRECTORS Chairman & Managing Director Director (Workman Employee) Director (Officer Employee) Nominee (RBI) Executive Director Director(PartTimeNonOfficial) Executive Director Nominee (Govt) Director(PartTimeNonOfficial) Company Secretary K.R.Kamath Mohinder Paul Singh Pradeep Kumar Jasbir Singh RakeshSethi MushtaqAtaullahAntulay UshaAnanthasubramanian Anurag Jain B.B.Chaudhry A.Gopinathan

13

Director (Shareholder)

M.N.Gopinath D.K.Singla Sunil Gupta

Executive Director 2.7 AWARDS: i.

Sadhu Ram Bansa

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. iv.

Golden Peacock Award- for excellence in corporate governance in 2005. 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. vii. viii. ix. x. xi. xii. xiii.

PNB Awarded Best Technology Bank 2010. PNB Bagged Golden Peacock National Training Award 2011. PNB bags Most Socially Responsive Bank Award 2011. PNB receives Best Bank Award 2011. PNB Awarded Golden Peacock HR Excellence Award 2011. PNB Awarded SKOCH Challenger Award 2011 on Financial Inclusion. PNB Awarded Overall Best Corporate Social Responsibility Awards 2012. 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. 1 2 3 4 5 Name of the Bank 2 4 5 Coin Size (in Grams) 8 10 20 50 x 100 x x x x x

Allahabad Bank 6571 12769 15805 25208 31233 62274 Andhra Bank

6484 12615 15685 24963 31197 61918 153916

Bank of Baroda 6497 12773 15916 25335 31622 62981 156520 Bank of India Central Bank of India x 12679 15815 25079 31397 62209 153225 x 31381 x x x

6482 12672 15797

6 Corporation Bank 6611 12584 15800 25151 7 Indian overseas Bank Oriental Bank of Com. Punjab National Bank Punjab & Sind Bank SBI/SBM/SBT/S BOP State Bank of Hyderabad Union Bank of India Federal Bank HDFC Bank IndusInd Bank 6414 12579 x

61960 153062 300593

24957 31248 61927 153139 304715

15850 25335 31536

6708

16511 26040 32628 64903

10

15900 25535 31790 63320

11

6361 12551 15646 24931 31121 61692 153558

12

6549 12756

25122 31390 62308 154969

13 14 15 16

6486 6805 x x x

x x x x x

15890 25425 31731 63262 158655 16445 25820 17401 16802 x x x

64754 161222 321684

34468 68633 171010 341707 33381 x x 165232 x

17 Kotak Mahindra

17191 27467

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 Banks rate as base rate. For percentage difference in price formulae is ---------------( Price of per gram Gold Base rate of per gram Gold Base rate of per gram Gold ) 100

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 Gold coin VAT @1% Discount Rate Gold coin Gold rate gram (d=c/2) Percentage

the Bank

percentage after by discount if any

per coin rate difference of per gram(e) (Rs.) SBI in price ( d-e )100 e

rate of (b = a + given 2gm(a) 1% (Rs.) a) (Rs.) of Bank (Rs.)

(c = b - (Rs.) discount % of b) (Rs.)

Allahabad Bank Andhra Bank Bank Baroda Bank India Central Bank India Corporatio n Bank Indian overseas Bank of of of

6571

6636.71

3318.35 5

3318.355

3212.30 5

3.30%

6484

6548.84

3274.42

3274.42

3212.30 5

1.93%

6497

6561.97

1%

6496.35

3248.18

3212.30 5

1.11%

3212.30 5

6482

6546.82

6546.82

3273.41

3212.30 5

1.90%

6611

6677.11

6677.11

3338.555

3212.30 5

3.93%

6414

6478.14

6478.14

3239.07

3212.30 5

0.83%

18

Oriental Bank Com. Punjab National Bank Punjab & Sind Bank SBI/SBM/ SBT/SBO P State Bank of of

3212.30 5

6708

6775.08

Up to 5 coins-5% Above 6 coins-6%

6436.32 6 6368.57 5 x

3218.163

3212.30 5

0.18%

3184.288

-0.87%

3212.30 5

6361

6424.61

6424.61

3212.305

3212.30 5

0%

6549

6614.49

6614.49

3307.245

3212.30 5

2.96%

Hyderaba d Union Bank India Federal Bank HDFC Bank IndusInd Bank Kotak Mahindra 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. x x x x x x x x x x x x x 6805 6873.05 4% 6598.12 8 x x 3299.064 3212.30 5 3212.30 5 3212.30 5 3212.30 5 x x x 2.70% of 6486 6550.86 x 6550.86 3275.43 3212.30 5 1.97%

19

For 4gm: 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 Gold coin VAT @1% Discount Rate Gold coin Gold rate gram (d=c/2) Percentage

the Bank

percentage after by discount if any

per coin rate difference of per gram(e) (Rs.) SBI in price ( d-e )100 e

rate of (b = a + given 4gm(a) 1% (Rs.) a) (Rs.) of Bank (Rs.)

(c = b - (Rs.) discount % of b) (Rs.)

Allahabad Bank Andhra Bank Bank Baroda Bank India Central Bank India Corporatio n Bank Indian overseas Bank of of of

12769

12896.6 9

12896.6 9

3224.17

3169.13

1.74%

12615

12741.1 5

12741.1 5

3185.29

3169.13

0.51%

12773

12900.7 3

1%

12771.7 2

3192.93

3169.13

0.75%

12679

12805.7 9

12805.7 9

3201.48

3169.13

1.02%

12672

12798.7 2

12798.7 2

3199.68

3169.13

0.96%

12584

12709.8 4

12709.8 4

3177.46

3169.13

0.26%

12579

12704.7 9

12704.7 9

3176.20

3169.13

0.22%

20

Oriental Bank Com. Punjab National Bank Punjab & Sind Bank SBI/SBM/ SBT/SBO P State Bank of of

3169.13

3169.13

3169.13

12551

12676.5 1

12676.5 1

3169.13

3169.13

0%

12756

12883.5 6

12883.5 6

3220.89

3169.13

1.63%

Hyderaba d Union Bank India Federal Bank HDFC Bank IndusInd Bank Kotak Mahindra 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. x x x x x 3169.13 x x x x x x 3169.13 x x x x x x 3169.13 x x x x x x 3169.13 x of x x x x x 3169.13 x

21

For 5gm: 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 Gold coin VAT @1% Discount Rate Gold coin Gold rate gram (d=c/2) Percentage

the Bank

percentage after by discount if any

per coin rate difference of per gram(e) (Rs.) SBI in price ( d-e )100 e

rate of (b = a + given 5gm(a) 1% (Rs.) a) (Rs.) of Bank (Rs.)

(c = b - (Rs.) discount % of b) (Rs.)

Allahabad Bank Andhra Bank Bank Baroda Bank India Central Bank India Corporatio n Bank Indian overseas Bank of of of

15805

15963.0 5

15963.0 5

3192.61

3160.49

1.02%

15685

15841.8 5

15841.8 5

3168.37

3160.49

0.25%

15916

16075.1 6

1%

15914.4 1

3182.88

3160.49

0.71%

15815

15973.1 5

15973.1 5

3194.63

3160.49

1.08%

15797

15954.9 7

15954.9 7

3190.95

3160.49

0.96%

15800

15958

15958

3191.60

3160.49

0.98%

3160.49

22

15850

16008.5

Up to 3 gold coins-3%

15528.2 5

3105.65

3160.49

-1.74%

Oriental Bank Com. of

4-9 Gold Coins-4% Above 9 Gold coins-5% 16511 16676.1 1 Up to 5 Gold coins-3% Above 5 Gold coins-4% 15900 16059 Up to 3 Gold coins-3% 4-9 Gold

15368.1 6 15208.0 8

3073.63

-2.75%

3041.62

-3.76%

16175.8 3

3235.17

3160.49

2.36%

Punjab National Bank

16009.0 7

3201.81

1.31%

15577.2 3

3115.45

3160.49

-1.43%

15416.6 4 15256.0 5

3083.33

-2.44%

Punjab & Sind Bank

Coins-4% 10-49 Gold coins-5% Above 49 Gold coins-6%

3051.21

-3.46%

15095.4 6

3019.09

-4.47%

SBI/SBM/ SBT/SBO P State Bank of

15646

15802.4 6

15802.4 6

3160.49

3160.49

0%

3160.49

Hyderaba d

23

Union Bank India Federal Bank HDFC Bank IndusInd Bank Kotak Mahindra Inference of

15890

16048.9

16048.9

3209.78

3160.49

1.56%

16445

16609.4 5

16609.4 5

3321.89

3160.49

5.11%

17401

17401

3480.2

3160.49

10.12%

16802

16970.0 2

16970.0 2

3394

3160.49

7.39%

17191

17362.9 1

17362.9 1

3472.58

3160.49

9.87%

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 Gold coin VAT @1% Discount Rate Gold coin Gold rate gram (d=c/2) Percentage

the Bank

percentage after by discount if any

per coin rate difference of per gram(e) (Rs.) SBI in price ( d-e )100 e

rate of (b = a + given 8gm(a) 1% (Rs.) a) (Rs.) of Bank (Rs.)

(c = b - (Rs.) discount % of b) (Rs.)

Allahabad Bank Andhra Bank Bank Baroda Bank India Central Bank India Corporatio n Bank Indian overseas Bank of of of

25208

25460.0 8

25460.0 8

3182.51

3147.54

1.11%

24963

25212.6 3

25212.6 3

3151.58

3147.54

0.12%

25335

25388.3 5

1%

25134.4 7

3141.81

3147.54

-0.00003%

25079

25329.7 9

25329.7 9

3166.22

3147.54

0.59%

3147.54

25151

25402.5 1

25402.5 1

3175.31

3147.54

0.80%

24957

25206.5 7

25206.5 7

3150.82

3147.54

0.10%

25

25335

25588.3 5

up to 3 gold coins-3%

24820.7 0

3102.59

3147.54

-1.43%

Oriental Bank Com. of

4-9 gold coins-4% above 9 gold coins-5% 26040 26300.4 0 up to 5 gold coins-3% above 5 gold coins-4% 25535 25790.3 5 up to 3 gold coins-3% 4-9 gold

24564.8 2 24308.9 3

3070.60

-2.45%

3038.62

-3.46%

24985.3 8

3123.17

3147.54

-0.77%

Punjab National Bank

24722.3 8

3090.30

-1.82%

25016.6 4

3127.08

3147.54

-0.65%

24758.7 4 24500.8 3

3094.84

-1.67%

Punjab & Sind Bank

coins-4% 10-49 gold coins-5% above 49 gold coins-6%

3062.60

-2.70%

24242.9 3

3030.37

-3.72%

SBI/SBM/ SBT/SBO P State Bank of

24931

25180.3 1

25180.3 1

3147.54

3147.54

0%

25122

25373.2 2

25373.2 2

3171.65

3147.54

0.76%

Hyderaba d

26

Union Bank India Federal Bank HDFC Bank IndusInd Bank Kotak Mahindra Inference of

25425

25679.2 5

25679.2 5

3209.91

3147.54

1.98%

25820

26078.2 0

4%

25035.0 7

3129.38

3147.54

-0.58%

3147.54

3147.54

27467

27741.6 7

27741.6 7

3467.71

3147.54

10.17%

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 Gold coin VAT @1% Discount Rate Gold coin Gold rate gram (d=c/2) Percentage

the Bank

percentage after by discount if any

per coin rate difference of per gram(e) (Rs.) SBI in price ( d-e )100 e

rate of (b = a + given 10gm (a) (Rs.) 1% a) (Rs.) of Bank (Rs.)

(c = b - (Rs.) discount % of b) (Rs.)

Allahabad Bank Andhra Bank Bank Baroda Bank India Central Bank India Corporatio n Bank Indian overseas Bank of of of

31233

31545.3 3

31545.3 3

3154.53

3143.22

0.36%

31197

31508.9 7

31508.9 7

3150.90

3143.22

0.24%

31622

31938.2 2

1%

31618.8 4

3161.88

3143.22

0.59%

31397

31710.9 7

31710.9 7

3171.10

3143.22

0.89%

31381

31694.8 1

31694.8 1

3169.48

3143.22

0.84%

3143.22

31248

31560.4 8

31560.4 8

3156.05

3143.22

0.41%

28

31536

31851.3 6

up to 3 gold coins-3%

30895.8 2

3089.58

3143.22

-1.71%

Oriental Bank Com. of

4-9 gold coins-4% above 9 gold coins-5% 32628 32954.2 8 up to 5 gold coins-3% above 5 gold coins-4% 31790 32107.9 0 up to 3 gold coins-3% 4-9 gold

30577.3 1 30258.7 9

3057.73

-2.72%

3025.88

-3.73%

31965.6 5

3196.57

3143.22

1.70%

Punjab National Bank

31636.1 1

3163.61

0.65%

31144.6 6

3114.47

3143.22

-0.92%

30823.5 8 30502.5 1

3082.36

-1.92%

Punjab & Sind Bank

coins-4% 10-49 gold coins-5% above 49 gold coins-6%

3050.25

-2.96%

30181.4 3

3018.14

-3.98%

SBI/SBM/ SBT/SBO P State Bank of

31121

31432.2 1

31432.2 1

3143.22

3143.22

0%

31390

31703.9 0

31703.9 0

3170.39

3143.22

0.86%

Hyderaba d

29

Union Bank India Federal Bank HDFC Bank IndusInd Bank Kotak Mahindra Inference of

31731

32048.3 1

32048.3 1

3204.83

3143.22

1.96%

3143.22

34468

34468

3446.80

3143.22

9.66%

33381

33714.8 1

33714.8 1

3371.48

3143.22

7.26%

3143.22

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 Gold coin VAT @1% Discount Rate Gold coin Gold rate gram (d=c/2) Percentage

the Bank

percentage after by discount if any

per coin rate difference of per gram(e) (Rs.) SBI in price ( d-e )100 e

rate of (b = a + given 20gm (a) (Rs.) 1% a) (Rs.) of Bank (Rs.)

(c = b - (Rs.) discount % of b) (Rs.)

Allahabad Bank Andhra Bank Bank Baroda Bank India Central Bank India Corporatio n Bank Indian overseas Bank of of of

62274

62896.7 4

62896.7 4

3144.84

3115.45

0.94%

61918

62537.1 8

62537.1 8

3126.86

3115.45

0.37%

62981

63610.8 1

1%

62974.7 0

3148.74

3115.45

1.07%

62209

62831.0 9

62831.0 9

3141.55

3115.45

0.84%

3115.45

61960

62579.6 0

62579.6 0

3128.98

3115.45

0.43%

61927

62546.2 7

62546.2 7

3127.31

3115.45

0.38%

31

Oriental Bank Com of

3115.45

64903 Punjab National Bank

65552.0 3

up to 5 gold coins-3% above 5 gold coins-4%

63585.4 7

3179.27

3115.45

2.05%

62929.9 5

3146.50

1%

63320

63953.2

up to 3 gold coins-3% 4-9 gold

62034.6 0

3101.73

3115.45

-0.44%

61395.0 7 60755.5 4

3069.75

-1.47%

Punjab & Sind Bank

coins-4% 10-49 gold coins-5% above 49 gold coins-6%

3037.78

-2.49%

60116.0 1

3005.80

-3.52%

SBI/SBM/ SBT/SBO P State Bank of

61692

62308.9 2

62308.9 2

3115.45

3115.45

0%

62308

62931.0 8

62931.0 8

3146.55

3115.45

1%

Hyderaba d Union Bank India Federal Bank 64754 65401.5 4

32

63262 of

63894.6 2

63894.6 2

3194.73

3115.45

2.54%

4%

62785.4 8

3139.27

3115.45

0.76%

HDFC Bank IndusInd Bank Kotak Mahindra Inference

68633

68633

3431.65

3115.45

10.15%

3115.45

68377

69060.7 7

69060.7 7

3453.04

3115.45

10.84%

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 PNBs profitability. 4.3 RECOMMENDATIONS 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
35

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. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii.
https://www.pnbindia.in/En/ui/Daily-gold-coin-rates.aspx#GC March 22, 2013 https://www.allahabadbank.in/gold-coin-selling-rates.asp March 22, 2013 http://andhrabank.in/english/goldcoin.aspx March 22, 2013 http://www.bankofbaroda.co.in/gold-new.asp March 22, 2013 http://www.bankofindia.co.in/english/View_goldcoin.aspx March 22, 2013 https://www.centralbankofindia.co.in/site/indexcbi.aspx March 22, 2013 http://corpbank.com/asp/corpbank-goldcoins_1165.asp March 22, 2013 https://www.obcindia.co.in/obcnew/site/gold_coins.aspx March 22, 2013 http://www.iob.in/GoldRate.aspx March 22, 2013 https://www.sbi.co.in/user.htm?action=goldRates March 22, 2013 https://www.psbindia.com/PSB_SWARAN_MUDRA.php March 22, 2013 http://www.sbhyd.com/online-services/gold-coins/ March 22, 2013 http://www.unionbankofindia.co.in/personal_insurance_gold_pricing.aspx March 22, 2013

xiv. xv.

http://www.federalbank.co.in/gold-rate March 22, 2013 http://www.indusind.com/indusind/wcms/en/home/rates/goldrates/index.html March 22, 2013

xvi. xvii.

http://www.kotak.com/bank/common/gold_rates.htm March 22, 2013 http://www.hdfcbank.com/personal/product/productdetails/invest-in-goldmudra-pure-gold-bar/gts8mirk March 22, 2013

37