New Delhi: The department of posts on Wednesday said it will sell gold coins at post offices across the country, in an attempt to increase revenue, adding to the various products it already sells.
“The identity of post offices should not be lost... Our aim is to serve the people through gold. Gold is always connected with people,” said A. Raja, Union minister of communications and information technology, or IT.
The department of posts, which comes under the ministry of communications and IT, ended 2006-07 with revenue of Rs5,322 crore and a net loss of Rs1,249 crore. A break-up of revenue wasn’t available.
The 24-carat gold coins will be sold in denominations of 0.5g (Rs887 today), 1g (Rs1,633), 5g (Rs7,644), and 8g (Rs12,115).
Initially, the gold coins will be sold at 100 post offices across New Delhi, Tamil Nadu, Maharashtra and Gujarat in association with Reliance Money Ltd, a unit of the Anil Ambani-promoted Reliance Capital Ltd, and World Gold Council, an association of international gold mining companies.
“In a couple of weeks we will sell gold coins across (all post offices) the country,” said Sudip Bandopadhyay, director and chief executive, Reliance Money.
There are about 150,000 post offices in India at present.
The yellow metal is currently priced at $847.10 (Rs40,999) per ounce (around 28.35g).
“Unlike banks, which sell gold coins at a margin of around 12%, post offices will sell gold coins at a margin of around 7%. Customers will therefore get price benefit if they buy from post offices,” said Ajay Mitra, managing director, World Gold Council.
India is the world’s biggest consumer of gold consuming 700 tonnes every year.
Gold gained more than 1% on Wednesday even as stocks declined and amid renewed fears that the global economy could be headed for a recession. Gold traded around $900 an ounce in September and touched a two-month high of $931 last week before losing a bit. It touched a record high of $1,030.80 in March.
India’s post offices retail several products including university application forms, aloe vera products (in Gujarat), Darjeeling tea (in West Bengal) and even books on yoga by Baba Ramdev, a popular yoga teacher.
Reuters contributed to this story.