Kerala's largest gold loan cos hold more gold than Belgium or Australia Gold holdings at Muthoot Finance, Manappuram Finance and Muthoot Fincorp stood at 263 tonnes in Sept
Representative image of gold jewellery. Photo: Reuters
Kerala's three largest gold loan companies jointly possess more of the precious metal than the gold reserves of Belgium, Singapore, Sweden or Australia, reported the Times of India on Tuesday.
The gold holdings at Muthoot Finance, Manappuram Finance and Muthoot Fincorp stood at 263 tonnes towards the end of September 2016, up from 195 tonnes nearly two years ago, the report added.
According to the national daily, Muthoot Finance alone has holdings which trump the reserves of many rich, first-world countries. With its holdings growing to 150 tonnes from 116 tonnes over the past two years, Kerala's largest gold loan company, Muthoot Finance, holds more of the precious metal than the reserves of Singapore (127.4 tonnes), Sweden (125.7 tonnes), Australia (79.9 tonnes), Kuwait (79 tonnes), Denmark (66.5 tonnes) and Finland (49.1 tonnes). The report added that Manappuram Finance held 65.9 tonnes of the yellow metal, while Muthoot Fincorp held 46.88 tonnes.
Related Article: Bitcoin best performer of 2016, outlook bullish for next year Of course, these institutions are not the only one's in Kerala which can boast of such rich reserves. According to a Business Standard report from earlier this year, Kerala's Padmanabhaswamy Temple has reserves which dwarf those of the abovementioned gold loan companies. During a dramatic court battle in 2011 over the riches in this 16th-century institution, a Supreme Court-approved team discovered $22 billion worth of the yellow metal, from around 1,300 tonnes of gold jewellery at the then price. This bounty was found in five hitherto secret cellars.
Business Standard estimated, earlier this year, that temples in India could be holding 3,000-4,000 tonnes of gold. The estimate was made after talking to temple institutions,
bankers, bullion analysts and research reports. These holdings would be in the form of coins, jewellery and gold articles.
The fact that Indians have an insatiable appetite for gold is nothing new, and a Business Standard report from earlier this month, which cites the latest report by Karvy Wealth Management, reinforces this fact. While the individual wealth in physical assets, according to Karvy’s India Wealth Report 2016, stood at Rs 132-lakh crore having grown at a brisk pace of 10.32% in FY16 compared to a 2% decline in FY15, individual wealth in gold stood at Rs 65.90-lakh crore – nearly half the share of physical assets! This has grown nearly 15.41% from Rs 57.1-lakh crore in FY15.
However, despite the gold craze in the country, the yellow metal lost some of its shine in 2016. According to the same news report, the World Gold Council expects India's gold demand to fall as much as 24% in 2016 to the lowest level in seven years due to higher prices and increased smuggling as the government seeks to bring transparency to bullion purchases. India's golddemand in the first three quarters of 2016, according to estimates, fell 29% from a year ago to 441.2 tonnes, hit by price rises and government moves such as the mandatory disclose of tax code for high-value jewellery purchases.
However, gold imports did see an upside immediately after demonetisation. As reported by Business Standard, a day after Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 currency notes would cease to be legal tender from the midnight of November 8 – a move aimed at cracking down on the flow of black money – those in possession of unaccounted wealth were seen rushing to jewellers to buy gold. While these people were willing to pay huge premiums, jewellers were ready to accept old currency notes. The transactions took place on past-dated bills; even VAT was paid. As a result of this rush, there was a sudden spurt in demand for gold. According to market
estimates, as much as $1 billion worth of gold, or around 30 tonnes, has been imported since November 9. Thomson Reuters estimates that India’s gross official import of goldwas worth nearly $1.5 billion as of November 14. Of this, as much as $900 million worth of the metal was imported after the demonetisation of high-value legal tenders. READ SOURCE :