The new wealth management service from
Paytm is called
Digital Gold. Through an exclusive partnership with
MMTC-PAMP, Paytm will allow users to buy gold starting at Re 1.
“We actually wanted to launch this with Paytm Bank but since the launch is delayed, we are launching now, in time for Akshaya Tritiya (falling on 28th April, 2017),” said Vijay Shekhar Sharma (VSS), founder of Paytm.
“It is our belief that this what India’s wealth management and gold standard in wealth management will be. We believe that this kind of product is not meant for people with large money, but this is meant for the auto rickshaw driver, or the corner store owner and for everybody who probably earns money in cash and has no way to keep it in the bank or if they don’t have a bank account.
Mehdi Barkhordar, chairman of MMTC-PAMP India said citing data from 2014, “for every bank branch there are three jeweller outlets. In another instance he said, “For every household with a bank account, there are 3 households that hold gold. 24,000 tonnes of gold worth 900 billion dollars is kept at homes and bank lockers. Last year India invested in gold more than any other retail asset.” So this absolutely makes sense for both MMTC-PAMP and Paytm, who has a margin on the transactions.
What is MMTC – PAMP?MMTC – PAMP website says it is one of the world’s most advanced gold and silver refining and minting facilities. It’s a joint venture between
MMTC Limited of India and
PAMP SA of Switzerland.
The JV entity is India’s first and only internationally certified gold and silver refinery.
Metals and Minerals Trading Corporation (MMTC) was established in 1963 and is India’s largest public sector trading body and first public sector enterprise to be accorded the status of Five Star Export Houses by the Government of India.
Produits Artistiques Métaux Précieux (PAMP) was established in 1977 and is one of the world’s leading bullion brands and has over 40 years of experience working with precious metals.
Paytm Digital Gold is officially launching today but the pilot project has been running for the past 6 months. Krishna Hegde, VP at Paytm said, “We sold 10 kg of gold in the pilot project, and there were many purchases in the Re 1 and Rs 100 range.” However during late morning on the 27th of April, most of the purchases were in the 500 rupee range. “It’s a great way to democratize gold purchasing since the 1g of gold may cost around 3000 rupees and the average rural household may earn around 16,000 rupees a month.”
If you’re curious, based on the gold market’s spot pricing,
for Re 1 we were able to purchase 0.0003g of gold. The gold is stored in a locker provided by MMTC-PAMP. To have the gold delivered to you it has to be a minimum of 1g. Krishna also said users have the option of selling the gold back to MMTC-PAMP and the money will be credited to your bank account. There appears to be no maximum amount of gold you can buy. However beyond the 20,000 rupee limit a month, you will be prompted for KYC authentication. To purchase beyond 50,000 rupees of gold there will be other RBI compliances to satisfy.
BW Reporters
Regina is a reporter for BW Businessworld. In her previous assignments, she has worked with Independent television Network as a news anchor and reporter in Sri Lanka
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