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Sunday, January 1, 2012

An ATM that will dispense – Gold, Silver and Jewellery…….

Just like our neighbourhood grocery stores, Banks were personal affairs – not too long ago.  One of my friends who got his posting in a rural area – a village not far away from Chennai in mid 1980s said he enjoyed the fame of being called ‘banku thambi’ [literally bank brother] wherever he went inside the village – those days – filling up a withdrawal slip for withdrawing money or the challan for depositing money was perceived a challenge by some.
Then slowly personal banking was threatened by those machines which dispensed cash – notes – mostly of specified denomination.. – most ATMs in Chennai dispense 500s and the last 500 in 100s – there are some which dispense 1000 rupee notes.  ATM called by some as ‘anytime money’ are Automated teller machines (also known as Cashpoint – a rade mark of Lloyds TSB)  are man-free interaction points through devices from which people can access their bank accounts and withdraw or deposit cash.  Initially they were installed outside Bank premises, then slowly found their way to petrol pumps, customer points, shopping malls and elsewhere.  The first ATM was introduced by Barclays Bank in Enfield, UK in 1967 – the use of plastic card with unique no. requiring authentication of Password has become so common these days !
One can withdraw from their Bank account using Debit card as also use Credit card to withdraw cash where no amount exists in the bank account.  From the traditional withdrawal from Bank standing in queue filling challans and always appearing bemused, automated teller machines (ATM) have changed the way of money transaction. All and sundry now flaunt no. of cards and allowing withdrawal from ATM of any bank has just added to the confusion. I fail to understand  why people should queue before ATM and how do people get change of small denominations for their daily needs  ?
Many for sure get attracted by the  yellow metal, GOLD - a chemical element with symbol Au (from Latin: aurum, "shining dawn") and an atomic number of 79. From time immemorial it has more value attached than its intrinsic and utilitarian value. It is malleable and the ornaments are indeed attractive. Thousands of tonnes of gold continue to be mined.   I had earlier posted one on the innovative sale pitch of TG Gold Super Market.  Going by the adage that ‘gold is the best thing to have in pocket in uncertain economic times, they provided a new angle to the gold sale.  They made a beginning  at Airport in Frankfurt and a luxury hotel in Abu Dhabi where Vending machine gives you shining gold. It is not only shining luster looking machines ; the machines gave out gold in the form of 1 gram, 5 gram, 10 gram and 1 ounce bars, and also Krugerrand, Kangaroo and Maple Leaf gold coins (individual machines may have custom settings). The bars and coins  attractive in snazzy presentation cases reportedly costed  about 20 percent less than what a German bank or other financial institution would charge.
Now an Indian Company – Gitanjali Gems has gone one step further. For  the first time in the world, Gitanjali Gems, the world’s largest integrated-branded diamond jewellery manufacturer and retailer, has introduced gold, silver and diamond sales through vending machines.  It is claimed that in  operations, these machines would be like banks’ automated teller machines (ATMs) used for cash withdrawal. However, it differs in the nature of transactions.  Instead of cash, the machine vends gold and silver coins, medallions and jewellery of customers’ choice, instantly.

Sale of precious metals, meant especially for last-minute gift purchases, is a unique concept. The products sold through these platforms would be in the price range of Rs 1,000-30,000, aiming to serve all classes of customers,” said Sanjeev Agarwal, CEO, Gitanjali Exports Corporation Ltd, a subsidiary of Gitanjali Gems.  The denomination of gold and silver coins can  be decided by the purchaser. The precious metals and stones are available in 36 different varieties, including gold and diamond pendants, and sole gold diamond pieces. The company has made a provision to pay either by Visa debit/credit card or by cash. For instant payment by cash, however, the payment of higher denomination currencies would be preferred.
The company has launched the first machine of its planned network of vending machines in Phoenix Mills at Lower Parel, Mumbai. In the coming months, it plans to expand the network in places with high consumer footfalls, such as premium malls, airports, temples, etc, to provide visitors with a range of last-minute purchase choices.  “We want to install 75 such machines in three years with an aim to generate a turnover between Rs 450 crore and Rs 500 crore,” Agarwal added.  These machines are said to be part of the larger ‘Go for Gold’ umbrella branding initiated by Gitanjali to promote the purchase of gold — in the form of jewellery or coins/bars.
In an unrelated incident, Income tax raids  across all offices of Gitanjali Gems, was reported and it was stated that even after spending the whole day at Gitanjali offices, they did not get access to company’s financial accounts.  In a stock exchange announcement, the company said that it successfully completed conversion and redemption of its 1% Foreign Currency Convertible Bonds (FCCB) worth USD 110 million, which matured on November 25, 2011.  Further the Company has informed that, out of FCCBs issued, two-thirds of those bonds were converted into equity shares and balance matured on November 25, 2011.

With regards – S. Sampathkumar.

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