bullion banking in the new world order presented by: ajay mathur 24th april 2006
TRANSCRIPT
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Bullion Banking in the New World Bullion Banking in the New World OrderOrder
Presented by:
Ajay Mathur
24th April 2006
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ContentsContents
1. Changing Business Dynamics.2. Bullion Banking.3. KYC / Due Diligence.4. Sharing of info./Transparency.5. Ask Questions.6. Demand Explanation.7. Be more involved in your business.8. Take New Initiatives.9. Concluding Remarks.
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Changing Business Changing Business DynamicsDynamics
• The world order is changing .• It means business dynamics are changing
- to accommodate newer ideas.• This entails changes in the way we do
business.• Since changes are frequent, we need to
be adaptable.
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Bullion BankingBullion Banking• Bullion Banking
commenced in 1980s.• It has now expanded its
scope:– Traditional financing of
mining projects– Financing of Metal
Inventory– Trading Positions– Exchange Traded Funds– In-process Manufacturing– Bridge Financing for many
Industries
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KYC / Due DiligenceKYC / Due Diligence
• Days of secrecy are over.• KYC is not just a form-filling
exercise.• We need to understand your
business in much greater detail.
• Group connections, ultimate beneficial owners, size/frequency of transactions.
• Do you comply with regulations?
• How do you handle large transactions?
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Sharing of Sharing of Information/ Information/ Transparency Transparency
• It enhances your credibility in the eyes of your suppliers and customers.
• Prepare business plans/ projections & share them with your bank
• For e.g. tell banks how a $50/oz rise in gold price overnight would affect your business and how will you deal with it.
• Treat this as an investment.
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Sharing of Information / Sharing of Information / TransparencyTransparency
• Audited Financial Statements– Do stocks include gold
borrowed against Guarantees? If not, are details part of notes?
– Are stocks commensurate with your borrowings?
– Have gold loans been used for gold purchases only?
– Are borrowing & security details provided in notes?
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Ask QuestionsAsk Questions• Why is a bank asking for
information?• Why should you comply with
that?• Why is a facility structured in a
particular way? For e.g. should you opt for a Trust Receipt facility on Gold or a S.T.Gold Loan?
• Why are you signing a particular document? What purpose does it serve?
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Demand ExplanationDemand Explanation
• All terms and conditions in writing, including the facility size and pricing.
• Pricing should be specific such as “Base Rate/LIBOR + %” so that you know what can change it and how often.
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Be more involved in your Be more involved in your BusinessBusiness
• Banks learn from their customers.
• Banks want their customers to perform well.
• Think of newer ways of doing business and tell your bank about it.
• Your old style has been successful. It may not, however, ensure success in future.
• Invest your time and money on your future.
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Take New InitiativesTake New Initiatives
• Support industry initiatives such as DMCC, GJG, WGC etc. as they are aimed at benefiting you.
• Be a catalyst to change.• Think positively and provide constructive
criticism.• Be futuristic and deal with steady partners
(suppliers / FIs / banks) who can help you achieve your goals.
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Concluding RemarksConcluding Remarks
• Past success is no guarantee for future success….
• …unless you change with the times.
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Thank You.Thank You.