Silver Notes a Hit with Urban Indian Gift Lovers
Source: The Economic Times, Sutanuka Ghosal (7/14/11)
"With silver prices easing, jewelers are minting notes of various sizes."
The gift market is taking note of a new product that has caught the fancy of the urban Indians—silver notes.
With silver prices easing a bit, jewelers are minting notes of various denominations such as Rs 500 and Rs 1,000 to cater to an ever-increasing demand of a rising number of aspirational middle-class Indians looking for unique gifting options for marriages and birthdays.
Harmesh Arora, director of the National India Bullion Refinery, said "Silver notes are looked upon as a good investment and gift option vis-á-vis coins and bars. The denomination of the note is equivalent to silver weight. For example, an Rs 50 note is equivalent to 50 grams of silver."
Silver notes, which were started by local jewelers in Mumbai, are now being used in other states as well, added Arora. Lalit Jagawat, proprietor of Nakoda Bullion said steps are being taken to make such gifts more popular.
"We are trying to popularize these products among people in rural India as they are the largest consumer of the white metal," he said. Until now, bullion dealers in India were trading in silver with chorsa weighing between 800 gm. and 1,400 gm. Nakoda Bullion has introduced the 1 kg. silver chorsa biscuit/bars in the market.
Silver has plummeted to Rs 57,000/kg. from the Rs 75,000/kg. that it was trading a few months ago. Retail investors in India had rushed to buy silver bars and coins during the metal's meteoric rise early this year.
However, silver imports will slow at least for the next month or two coinciding with monsoon season, which typically sees a lull in gold and silver buys as farmers focus on sowing crops. Rural areas make up 70% of India's gold demand and more than 60% of its silver consumption.