MUMBAI, February 12: The projects and Equipment Corporation (PEC) of India is the latest to join the list of 13 state-owned entities to handle gold.PEC, floated in 1971 as a subsidiary of State Trading corporation (STC) of India, is now a government-owned independent trading house.
It has a small equity of Rs 2 crore, reserves of Rs 20 crore and has a staff strength of 240 people headed by TPS Narang as chairman-cum-managing director.
Earlier PEC was engaged in exports of projects and engineering equipment. After moving out of the fold of STC in 1992, it shifted its focus to export of agroproduce and other bulk products. Since the past few months, it has also been engaged in gold imported through the Special Import Licences (SIL). During 1997-98, it hopes to net a total turnover of Rs 500 crore. The government has, through a notification no 36/1997-2002 dated January 29, 1998, included PEC in the list of entities permitted to trade in gold.This is in exercise of powers of the government conferred bysection 5 of the Foreign Trade (Development and Regulation) Act, 1992 (No 22 of 1992) read with paragraph 13 of the Export and Import (EXIM) Policy 1997-2002.
Amending the para 8.15 of the EXIM policy, the notification says: The exporter availing the schemes of gold/silver/platinum jewellery and articles thereof may obtain gold /silver/platinum from the nominated agencies. The nominated agencies are MMTC, Handicraft & Handloom Export Corporation (HHEC), State Trading corporation (STC), The Projects Equipment of India Ltd and any agency authorised by the Reserve Bank of India.
Following changes in the Gold Policy announced by the government, the RBI on November 7, had nominated seven banks to import gold and silver for sale to exporters. These banks are: Bank of India, Canara Bank, Indian Overseas Bank, Allahabad Bank, Bank of Nova Scotia, Standard Chartered Bank and ABN-Amro Bank."We were successful in convincing the government to permit us to handle gold on the strength of the fact that over the pastsix months we were the highest importer of gold through the SIL route," said a top PEC source.PEC, had during May-October 1997 had imported over 250 crore worth of gold against SIL and had contributed considerable amount to the Indian Equity Brand Fund.
The STC too was in the race, but is said to have managed to complete its SIL quota with "much difficulty."
Given the demand for gold in both domestic and international markets for Indian gold jewellery, PEC feels there is a good scope for clean business.
"We will compete with the other entities on the basis of our capacity to handle large volume of gold which will be available cheaper than other entities," the PEC source said.
According to PEC source, given the competition in handling gold, "We will have to cut on the margins to attract bulk buyers of gold who can take up around 100 crore worth of gold each month. We have already identified few of such buyers."
The banks are said to be charging around 0.5 per cent as service charge and commission forimporting gold on behalf of the bulk gold consumers, the jewellery makers and exporters.
SBI's on-screen gold trading
The State Bank of India (SBI) has introduced a `screen based trading' in gold to the domestic manufacturers at its recently computerised overseas branch.
SBI has also introduced other customer-choice facilities to sell gold in the domestic market.
It has arranged a consignment stock at the branch which will facilitate delivery of the metal on payment on the same day of fixing the rate.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
