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To: long-gone who wrote (48308)	2/7/2000 7:32:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116958

One we missed: PSU banks, Credit Swiss First gold assaying venture pact may collapse Pratibha Rathore -------------------------------------------------------------------------------- Mumbai, Jan 22: The pact between four public sector banks led by the State Bank of India (SBI) and international bullion supplier Credit Swiss First Boston (CSFB) for setting up of an outfit for assaying of yellow metal may fall through due to disagreement between the banks and CSFB on financial settlement. The memorandum of understanding (MoU) signed between the four banks -- SBI, Corporation Bank, Canara Bank, Allahabad Bank and CSFB in the second half of the fiscal 1999 is not expected to see the light of the day as CSFB has put a spoke in the agreement. It is demanding technical fee to the tune of Rs 75 lakh which was not mentioned in the initial agreement signed by both the parties. According to top bank sources, Rothschild (another international bullion supplier) is expected to be the most likely choice, if the existing arrangement with CSFB breaks down. Before the signing of MoU, SBI led banks were in talks with both CSFB and Rothschild. Disclosing the nature of discord between the twoparties, Corporation Bank chairman RS Hugar said, ``We are not happy with the way things are moving." The technical fee was not a part of the initial agreement. All the four banks will meet shortly to discuss the future course of action.' He further said that the banks are thinking of re-looking at the existing agreement and may form an alliance with some other bullion supplier of international repute. As per the MoU, in the assaying unit, 51 per cent of the equity is held by SBI, 26 per cent by CSFB, 6 per cent by Canara Bank, 8.5 per cent each by Corporation Bank and Allahabad Bank. The assaying standards will be laid down by the Bureau of Indian Standard (BIS) and World Gold Council (WGC) will serve as a facilitating agency.The proposed unit will facilitate assaying to determine the purity of gold approved by the BIS, Hallmark Jewellery and perform the function of a refinery. According to the proposal, the member banks will have their representatives on the board of the new entity which will helpthe financial derivative products to take off smoothly. The WGC will function as a facilitating agency for smooth gold trading at the retail level. The hallmark on gold will be similar to ISI mark stamped on industrial products. The BIS Act of 1986 will be amended and certification of purity of gold will be in accordance with global standard. Copyright ¸ 2000 Indian Express Newspapers (Bombay) Ltd. financialexpress.com