Jeweler collaborates with banks to collect scrap gold

ISTANBUL - Hürriyet Daily News

Bank in Turkey has started collecting gold after a Central Bank decision that increased required gold reserves. AA photo

A jewelry chain, Atasay, has come to an agreement with two large banks, İşbank and Garanti Bank, and is in talks with several others to collect under-the-pillow gold. The move comes after a jewelry association president had earlier warned banks to stop collecting “scrap gold,” warning that jewelers could stage a joint protest.

“We are in talks with Halkbank, Ziraat Bank and Denizbank. The goal is to bring under-the-pillow gold into the economy,” Cihan Kamer, the chairman of Atasay, one of the largest jewelry chains in Turkey.

The talks will conclude this week or at the beginning of next week at the latest, he added.

Gold banking has become one of the latest banking trends in Turkey, as the Central Bank recently raised the required reserve ratio for Turkish Lira liabilities that can be held in gold from 10 percent to 20 percent.

Previously, potential customers could open a gold deposit in bank branches only on particular days that a gold specialist was assigned. It is now possible to do this every day at jewelry stores. İşbank and Garanti’s customers can take their gold jewelries to Atasay stores, where they provide a transaction certificate.

Noting that Atasay would collect gold for İşbank and Garanti beginning from the first days of next month, Kamer said, “Banks previously had gold collecting days once a week. But we are able to do that every weekday at nearly 500 points in Turkey. We have the necessary infrastructure and professionals.”

It will not create a drawback in terms of competition to collect gold for more than one bank, according to Kamer, as the customers will have already decided on the bank they want to work with. “We will not guide [the customers] in this matter,” he said.

Touching on the reactions of other jewelers to the banks’ collecting gold, Kamer said, “Jewelers become a part of the process with this collaboration. [This will increase] the customer traffic of the jewelers. It is in the interest of everyone if savings increase in Turkey.”

Istanbul Chamber of Jewelers President Alaattin Kameroğlu told daily Hürriyet on June 11 that the jewelers were not against banks collecting bullion gold, but that banks were essentially collecting scrap gold, which was negatively affecting the jewelry business.

“If banks continue doing this, all the jewelers in Turkey will get together and protest. We won’t work with those banks and we’ll give them back their POS machines,” he had said.