India will import gold.

The public-sector Union Bank of India (UB) has plans to enter the business of importing gold and selling that in the Indian markets. UB's chairman and managing director V Leeladhar told reporters here Thursday that after entering the business of marketing insurance policies, the bank planned to start selling imported gold, in the Mumbai market to begin with. The bank recently signed an MoU with Housing Development Finance Corporation (HDFC) to sell the latter's insurance policies. It also signed an MoU with public sector New India Assurance company for selling non-life insurance policies. Referring to the bank's first public issue of shares, Leeladhar said 180 million equity shares would be issued to raise Rs 2.88 billion. The issue would open on August 20 and close on August 28. The equity share of Rs 10 each would carry a premium of Rs 6, he said. The entire equity of the bank is currently held by the Government of India. After the public issue, the government's holding in the bank would be down to 60.8 per cent. He said the 83-year-old bank had been making profits all these years and had been declaring dividends. He expressed confidence that the prevailing drought conditions in several parts of the country would not affect the public issue.

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