SBI Gold Deposit Scheme: Deposited 999.9 purity Gold? Bank can redeem it in 999 or 995 purity!

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Updated: Nov 25, 2019 2:52 PM

SBI Gold Deposit Scheme: Under this scheme, the State Bank of India can redeem gold in 999 or 995 purity at its discretion, even if you have deposited Gold in 999.9 purity

SBI Gold Deposit Scheme DetailsSBI Gold Deposit Scheme Details: The NCDRC said that without melting the gold bars the purity of the gold could not have been correctly determined. Representational Image

SBI Gold Deposit Scheme: Under this scheme, the State Bank of India can redeem gold in 999 or 995 purity at its discretion, even if you have deposited Gold in 999.9 purity, according to an order by National Consumer Disputes Redressal Commission (NCDRC). Clause 9 of the scheme says: “For redemption in gold, the deposit will be redeemed in gold of 995/999 fineness in the multiple of 10 gm bars, at the discretion of the bank. In case the deposit is redeemed by the bank in 995 fineness, the equivalent weight of gold (i.e. equivalent to the deposit in 999 fineness) will be delivered in multiple of 10 gm bars…” As per this clause, the bank is “is required to redeem the gold in 995 / 999 purity at its discretion, meaning thereby that the bank can return the gold either in 995 or 999 purity,” NCDRC said in its order on November 15.

SBI Gold Deposit Scheme: The case

The NCDRC order came in the case of a person who had purchased two gold bars of 999.9 purity and weighing 500 grams each from Bank of India and deposited them with the State Bank of India under Sbi Gold Deposit Scheme.

The scheme envisages determination of the actual weight and purity of Gold by ASSAY, done after melting the gold bars. SBI had sent the gold bars to India Government Mint for testing their purity by melting. The purity of the gold bars was found to be 999.9 purity. But there was a nominal loss in the weight of the gold bars (0.04%) during the process of melting.

The India Government Mint certified that “the weight of the gold in 995 purity would be 502.161 for one bar and 501.809gms for the other bar. It was also certified that the weight in 999.0 purity would be 500.150 gms in respect of one bar and 499.800 gms in respect of the other bar.”

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Based on the purity and weight determined for the Mint, SBI sent certificates in terms of the scheme to the customers. He was informed that the weight of the gold bars was 499.8 in respect of one bar and 500.150 in respect of the other bar in 999 purity. The customer, however, disputed the weight certificate given by the bank and approached the District Forum for compensation. The district forum ruled in favour of the customer, saying the bank ” committed deficiency in providing service and adopted unfair trade practice in respect of the gold kept with them towards Gold Deposit Scheme.”

“The gold of whatever purity and weight was deposited with the respondent No.3 by the complainant they should return back the gold to the complainant with same purity and weight after completion of tenure of the scheme,” it added. The State Commission dismissed request of review of the District Forum’s order by the bank, which finally approached the NCDRC.

SBI Gold Deposit Scheme: NCDRC Order

The apex consumer dispute redressal body noted that ” the scheme envisaged acceptance of the gold only in scrap form. Therefore, the petitioner bank had to send the gold deposited with it to the Government Mint for the purpose of melting the same and determining its purity.”

“The complainant having accepted all the terms and conditions of the scheme and having deposited the gold thereunder can therefore have no grievance on account of the petitioner bank sending the gold bars to the Government Mint, for the purpose of ascertaining their weight and purity. In fact, without melting the gold bars the purity of the gold could not have been correctly determined. ”

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SBI Gold Deposit Scheme: Loss of weight to be borne by customer

The NCDRC said: “Without melting the gold bars the purity of the gold could not have been correctly determined. Since the bank was to accept the gold only in melted form and even otherwise it was necessary to melt the gold bars in order to verify their purity, the loss which happened during the process of melting has to be borne by the complainant and not by the petitioner bank.”

“In the present case, the certificates sent to the complainant gave their weight as determined by the Government Mint in 999 purity. The complainant therefore, can have no grievance with respect to the quantity or the purity of the gold which the petitioner Bank has promised to return to him,” the panel concluded.

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