Islamic bank offers gold-on-the-go from ATMs
ISTANBUL - Bloomberg | 1/10/2011 12:00:00 AM |
Turkish participation bank Kuveyt Türk said it would upgrade its automatic teller machines within a month to distribute gold as well as banknotes.
Turkish participation bank Kuveyt Türk, a lender that adheres to Islamic rules in banking, has said it will upgrade its automatic teller machines within a month to distribute gold as well as banknotes.
The ATMs will dispense certified gold coins, which customers can withdraw from gold deposit accounts at Kuveyt Türk or buy with a credit card or cash, said Irfan Yılmaz, executive vice president in charge of retail banking.
“It’s very popular in Turkey to use gold as a gift for newborn babies, for weddings, for all kinds of celebrations,” Yılmaz said in an interview. “This is a great convenience for customers, especially on weekends when it’s not so easy to find gold.”
Kuveyt Tark, a bank owned by the Kuwait Finance House, has increased marketing of gold products in the past three years as rising prices and the global crisis attracted record investment in the metal.
The bank has attracted about $300 million in gold deposits, attaining a market share of almost 20 percent since starting its gold products in 2007. That compares with its less than 1 percent share of overall Turkish banking assets.
Turkey imported more than $50 billion worth of gold in the seven years up to 2007, most of which is held by individuals and has never entered the banking system, Yılmaz said.
“We just want to bring the existing gold to the bank,” he said, adding that the amount of gold deposited in banks is almost doubling each year.
Osman Saraç, head of the Istanbul Gold Exchange, estimated in December that Turks had about 5,000 tons of hoarded gold, worth $220 billion at current prices, “hidden under their pillows.”
Kuveyt Türk’s ATMs will offer 1-gram or 2.5-gram coins through its existing dispensers, Yilmaz said. It will earn a commission of between 1 and 2 percent on the transactions.