Finkurve Financial Services Ltd, a non-banking finance company promoted by Bullion India, is planning to introduce the smallest systematic investment plan (SIP), akin to the gold accumulation scheme, to tap the last man in the value chain with potential to invest in gold.

Proposed to be launched after the Union Budget on February 1, Bullion India is offering its customers an opportunity to book gold with as little as Rs 300 in hand.

What this means is that a customer can buy even 100 milligrams (1/10th of a gram) of gold at the prevailing market price, which currently works out to less than Rs 29,050 per 10 grams in the spot market.

The scheme offers customers an opportunity to accumulate gold by investing just Rs 300 every month. Delivery of gold would be in multiples of 1 gramme in tamper-proof packages. The precious metal would be minted at a renowned refinery and retailed by a noted bullion dealer.

“The scheme offers an opportunity to accumulate gold with a small investment of just Rs 300 a month. The objective to start the scheme with such a small amount is to tap the potential in the last man in the value chain. We believe that a customer would not have any difficulty in investing Rs 300 or in its multiple every month. But he would realise the value in his investment over a period of time after accumulating the gold,” said Prithviraj Kothari, Managing Director, RiddSiddhi Bullions Ltd.

Since the purchase of gold is done on spot basis, there is no lock-in period or any other periodic restriction fixed for such an investment. Under this scheme, customers would have an option to get delivery of gold at their registered address or withdraw their money at any point in time.

“Such schemes are already available in the market with a minimum investment capped much higher than the one fixed by us. Most importantly, other players in competition seek a minimum commitment of Rs 1,000, which the small income class often cannot afford. In such cases, investors have been intermittently discontinuing after a few months,” Kothari said.

Also, jewellers offer customers the opportunity to book gold in grams and store it for a longer period of time.

“The difference between their (competitors’) product and ours is clear. Being jewellers or bullion dealers, they do not offer refund in cash, which we do. Being a non-banking finance company, we do not have any such problem in refunding customers cash,” said Kothari.

Apart from that, Bullion India offers customers the opportunity to accumulate silver in one gram and multiples thereof. So, a customer with just Rs 42 (current rate of Rs 41,485 a kg) in hand can start owning silver. Bullion India offers no periodic restrictions or limitations on booking and offers delivery of a minimum 10 grams of silver at anywhere in India.

The company books orders and deposits gold in the vault of its custodian, Brinks Arya. A customer can register online and after due KYC (know-your-customer) verifications, the company offers a registration code that can be used for booking bullion online. Under this scheme, customers’ accounts are connected with their bank accounts for automatic transfer of funds. Booking of orders and fund transfer thereof can be done on automatic or manual basis.

While the company had launched this scheme about two years ago, it was discontinued under request from the Union Ministry of Finance. The scheme will now be available for its existing and new customers after the Union Budget, said Kothari.

Kothari forecasts India’s gold import between 550-600 tonnes this year compared to an average 900-1,000 tonnes in last few years.