Millennium Post

‘RBI will not ban gold coin sales by banks’

Ruling out ban on sale of gold coins by banks, the Reserve Bank of India (RBI) on Tuesday asked lenders to refrain from aggressively selling the precious metal. 'We do not want banks to aggressively market gold. We do not want that to become a business,’ RBI Governor D Subbarao told reporters on the sidelines of a financial inclusion conference here.

Stating that the apex bank does not intend to ban sale of gold by banks, he said, 'Gold loans are a very small part of the banking business.' In a bid to curb demand for gold, the RBI had on Monday imposed restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs and mutual funds.

Stating that 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 that the RBI has a two-fold responsibility as a regulator and public policy institution and it is important to make people understand viable alternative avenues of investment as part of financial inclusion to wean them away from such schemes.

Subbarao further said that there are many 'unscrupulous schemes' which lure people with exorbitant rates of interest but do not come under the regulatory purview.
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