Turkish banks rush for gold
A visit to a municipal wedding hall in Istanbul nowadays would be enough to show how far Turkish banks are willing to go to get hold of the gold kept under the pillow and outside the financial system.
The wedding hall at the Umraniye district of Istanbul now sports a Golden Kiosk, installed by Kuveyt Turk, a participation bank that operates in accordance with Islamic lending rules.
Launched in May, the kiosk offers grams of gold to credit-card holders. Thus, wedding guests will no longer be able to say that they have forgotten to bring gold for the newlyweds – a traditional gift that helps support families.
The Golden Kiosk operates at four wedding halls – three of which are in Istanbul – but the format will spread soon, according to a press release from Kuveyt Turk.
Thanks to such innovative ideas, Kuveyt Turk has an 11% market share in gold banking; some 70,000 customers have gold accounts with the bank. According to bank executives, the lender’s gold deposits have reached 21.5 tonnes.
Estimates of gold kept outside the banking system by Turkish citizens vary, but generally fall between 1,500 and 6,000 tonnes.
This staggering amount has been attracting attention as lenders strive to keep a healthy balance between deposits and loans in an economy known for its appetite for consumption but also for its lack of private savings – the domestic savings rate has dropped from around 25% in 1980s to an alarming 12% in the 2010s.