From Outlook India
New Delhi
Tuesday, May 28, 2013
http://news.outlookindia.com/items.aspx?artid=799277
The Reserve Bank today ruled out a ban on sale of gold coins but asked
banks to refrain from aggressively selling the precious metal.
RBI Governor D Subbarao told reporters here that the RBI did not intend to
ban sale of gold coins by banks.
"We do not want banks to aggressively market gold. We do not want
that to become a business. Gold loans are a very small part of the banking
business," he said on the sidelines of a financial inclusion conference
here.
In a bid to curb demand for gold, the RBI yesterday imposed restrictions on
banks and non-banking financial companies for providing loans against gold
coins as well as units of gold ETFs and mutual funds.
Saying the route of buying gold for the purpose of genuinely saving should
be available to the people, Subbarao emphasised that investment in the
financial sector is good for the economy.
He also noted that the attractiveness of gold is a "consequence of
high inflation."
Talking about the need for financial inclusion, he said the RBI had a
two-fold responsibility as a regulator and public policy institution and it
was important to make people understand viable alternative avenues of
investment as part of financial inclusion to wean them away from such
schemes.
Subbarao said there were many "unscrupulous schemes" which did
not come under regulatory purview which lure people with exorbitant rates of
interest.
The conference was attended by some 90 delegates comprising rural
customers, business correspondents and rural branch managers of commercial
banks from Gujarat and Chhattisgarh.
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