Investor Issues
RBI wants you to buy gold from banks. You will lose twice!

Facing huge gold imports that is worsening India’s balance of payments, the government wants to curb gold buying. However, the RBI is pushing savers to buy gold from the banks. This is one of the worst options for everybody. While banks sell you gold at a premium the RBI does not permit banks to buy them back. You will have to sell them to jewellers and get a lower price!

India is facing an adverse balance of payments mainly due to massive gold buying by Indians. While the government wants to curb gold imports, the Reserve Bank of India (RBI) has no intention to ban gold coin sales by banks. This is strange because buying gold from banks happens to be one of the most inefficient ways of buying gold. Banks charge higher rates than jewellers. However, unlike jewellers who do buy back the gold they sell, banks are not allowed to, as per RBI directive. This means that RBI wants you to buy high and sell low. Moreover, the RBI has allowed banks to easily sell the yellow metal. We visited websites of some of the top banks namely: Andhra Bank, ICICI Bank, Axis Bank, State Bank of India and HDFC Bank, and found that pretty much anyone can walk into a bank and buy gold, sometimes with no documentation required.

The reason for this leniency about gold sales by banks is that RBI wants investors to “genuinely” buy gold rather than buy financial gold vis-a-vis gold ETFs and gold mutual funds and such. The RBI governor D Subbarao said as much recently. Remember, the RBI has imposed restrictions against banks, including NBFCs, on lending against gold ETFs and mutual funds. The government had taken several steps recently, including raising import duty, to curb the inbound shipments of gold. RBI too had put restrictions on banks on gold imports, which has led to forex outflow and widening of the current account deficit (CAD). But at the same time is encouraging customers to buy gold “genuinely”. 

The RBI had earlier said that specially minted gold coins sold by banks may not be in the nature of bullion or primary gold, there would be no objection to the bank granting loans against these coins. Yet, by allowing banks to continue gold coin sale, it is exacerbating the CAD deficit further.

One of the reasons it doesn’t allow banks to buy back gold is to discourage speculation. This makes no sense because people have several options to speculate in gold by taking not taking delivery. They don’t need to buy and sell gold coins from banks. Thanks to this silly idea of RBI, bank customers will have to go to jewellers and sell at a lower rate if they ever make the mistake of buying gold from banks.

That apart, banks follow different practices in their gold sales. You could walk into Andhra Bank and fork over cash to buy gold coins worth Rs20,000 without documentation. However, Axis Bank only offers gold to its customers. Anybody can walk into ICICI Bank and buy Rs50,000 worth of gold coins, but must require a cheque as the bank does not accept cash. Anything over Rs50,000, complete KYC is mandatory.

We also noticed that there is no uniformity amongst banks when it comes to customer verification. This makes is easier to target some banks to launder money. Some banks use KYC while some accept PAN cards and that too at different values. For instance, Axis Banks requires just an identity proof for gold coins between Rs20,000 and Rs50,000 and a PAN card for over Rs50,000. But Andhra Bank requires complete KYC for gold coins over Rs50,000. Strangely, SBI does not require any proof for transactions less than Rs50,000.

Only ICICI Bank, amongst the five banks mentioned above, has mentioned on its website of the limit to the number of times one can buy gold coins. One can buy six times every four months and up to Rs1 lakh per transaction (for self) and Rs50,000 on behalf of others.

One thing common among most of these banks is that an application form must be filled up while buying gold coins. Yet, this serves little purpose for those purchases that do not require documentation.



Brijesh Singh

4 years ago

This is all nonsense that the demand for gold is from general public.I am a financial advisor and I see people engaged in Real Estate,Builders,Government Officials even clerks in few government departments buying gold in Kgs every month, that to in cash from local jewellery shops.This is all black money in the economy which is driving gold demand.
To invest in financial products one needs to do KYC formalities how ever small sum one wants to invest,but for buying gold from jewellers you need cash.


Dayananda Kamath k

In Reply to Brijesh Singh 4 years ago

in the name of kyc and documents proofs and unimaginative rules they are driving out genuine small investors from the regulated investment avenues. all rules are to favour fiis to manipulate the markets. so dont you think it is a conspiracy to sell the country to foriegners.


4 years ago

I would rather prefer to own gold instead of the toilet roll fiat the government forces on me under the barrel of the gun. Rupee is not money as it's not backed by anything tangible.

Couldn't care any less about the "India shining". It's all a big scam by those at the top to steal the purchasing power of common man's savings. Let them collectively jump into a rivulet.

Dayananda Kamath k

4 years ago

rbi has not acted when banks were opening third party l/c in the name of bullion dealers against letter from nominated agencies in violation of import export policy. a restricted import has been made ogl by these banks. rbi woke up after years of my reporting to ban it. even they sought report from all banks about such transactions but did not act. even one of the nationalized bank lost heavily in tendulkar gold coin by unnecessarily importing additional coins non of the executives responsible were punished rather were promoted. god save this country from such regulators.


4 years ago

the best way to curb gold imports is to ban the imports fully so that inflow will be stopped and strict vigilence is to be exercised to curb smuggling.Of course this can happen it the concerned authorities are above borad. The RBi can also think gold control which was adoped by Morarji Desai Govt.Number of plitical people,business peope and others donate gold to temples. The temples while accepting such donations should obtain the full particulars of gold so purchased by the donors and also immediately inform Vigilence Dept.if they notice that it is black money.


4 years ago

I purchased ICICI bank coins way back in 2001 at the then exhorbitant rates, but now gained in 2013 with deep increase in market rates for the last 12 years, that to exchange of an ornament in jewellers's shop only.

Gopalakrishnan T V

4 years ago

This statement that 'RBI wants you buy gold from banks, You will lose twice' does not seem to be correct.It is reported that RBI has not banned banks from issuing gold and this stand of RBI also does not stand justification in the present context of import of gold by banks widening the current account deficit.The RBI should have not only banned the banks from selling goldcoins and also should have insisted the banks to buy back the gold at market prices. The risk in price fluctuations has to be borne by the investors.The banks have gone for Gold coins sale to make extra income which was perhaps a wrong policy permitted by the Reserve Bank and it could have been well avoided. The banks have imported heavily the Gold coins and they have no choice but to liquidate the stock through selling the coins to customers by hook or crook.The only solution available to RBI is to advise the banks to liquidate the imported gold coins at market prices and bear the loss or alternatively, RBI can purchase the stock at cost prices the banks have incurred and increase RBI stock.Making Customers to bear the burden of banks has to be avoided as they have already burned their fingers by purchasing coins from banks at a higher cost and they are forced to sell them in the market at a lower price.This is not in good taste and RBI could have avoided by permitting banks at the beginning itself to buy back gold.

Naresh Nayak

4 years ago

The RBI should be more concerned with the flight of capital out of deposits. This is really concerning and shows that the system is tilted against savers and depositors in favour of borrowers (who themselves are not happy anyway borrowing at such high rates). Catch 22.

The RBI should allow deposit rates to go up on its part in monetary policy and the Government should allow ease of doing business through doing it by making policy. Unfortunately the Government is more interested in furthering its cause in the 2014 elections. Businesses don't borrow looking at the interest rate. Take a look at Japan. What happened? Speculators borrowed the Yen, not japanese businessmen. There was demand despondency and deflation which could have been solved by cutting sky high taxes. Reducing rates to stimulate the economy will affect gross domestic capital formation.

Gold is the trade of the next 10 years whether the RBI likes it or not. Capital will flow into Gold. The RBI might as well allow Gold as collateral if it wants to leverage people's gold holdings and funnel it into the economy. And raise deposit rates please.

Sensex, Nifty may soon see profit booking : Wednesday closing report

A close below 6050 on the Nifty may lead to a fresh selloff

The Sensex opened at 20,203 while Nifty opened at 6,120 but almost immediately the market sold off and went into the negative. At the beginning of the session itself the benchmark hit their respective intra day high. Sensex hit a five day high (including today) at 20,216 while the Nifty hit a lower high at 6,125. After the opening of the European market the benchmark hit a higher low at 20,045 and 6,070. The market then moved in a narrow sideways range throughout the day finally ended marginally in the negative breaking the three consecutive day of gains. Sensex closed at 20,148 (down 13 points, 0.07%) while Nifty closed at 6,104 (down 7 points at 0.11%). The NSE saw volume of 51.08 crore shares.


US stocks closed in the positive last night after data showed that US home prices accelerated by the most in nearly seven years in March while consumer confidence picked up in May to its highest in more than five years. However, the indices suffered a steep drop from the intraday highs, signaling a rejection of prices at the current highs. At the time of writing the article, premarket futures were down 0.7%.


Among the broader indices, the BSE Mid-cap index fell 0.39% and the BSE Small-cap index fell 0.16%.


Among the sectoral indices the only five indices which gained were BSE Healthcare (up 1.82%); BSE Consumer Durables (up 0.82%); BSE FMCG (up 0.58%); BSE Auto (up 0.34%) and BSE Oil & Gas (up 0.12%). Among the loser were BSE Realty (down 2.50%); BSE Metal (down 1.13%); BSE Bankex (down 0.82%); BSE Power (down 0.77%) and BSE IT (down 0.64%).


Out of the 30 stocks on the Sensex, 12 settled higher. The major gainers were Sun Pharma (up 7.09%); Tata Motors (up 2.69%); Hero MotoCorp (up 2.39%); Coal India (up 1.30%) and Cipla (up 1.26%). The key losers were Sterlite Industries (down 2.53%); Tata Steel (down 2.27%); Jindal Steel (down 1.98%); Gail (down 1.50%) and ICICI Bank (down 1.38%).


The top two A Group gainers on the BSE were— Sun Pharma (up 7.09%) and Ipca Lab (up 5.09%). The top two A Group losers on the BSE were— Wockhardt (down 10%) and Jaypee Infratech (down 9.95%).


The top two B Group gainers on the BSE were— Aarvee Denims (up 20%) and Ricoh India (up 20%).

The top two B Group losers on the BSE were— Winsome Textile (down 19.90%) and Delta Leasing (down 18.64%).


Of the 50 stocks on the Nifty, 17 ended in the in the green. The main gainers were Sun Pharma (up 7.03%); Tata Motors (up 2.77%); Hero MotoCorp (up 1.80%); Coal India (up 1.42%) and Lupin (up 1.13%). The major losers were

Jaiprakash Associates (down 3.91%); Ranbaxy (down 3.11%); Grasim (down 2.86%); Tata Steel (down 2.73%) and Jindal Steel (down 2.58%).


The International Monetary Fund cut its growth forecast for China this year to 7.75% from 8%, citing a weak world economy and exports, adding to concerns that the world's second-largest economy is losing momentum.


Except for Hang Seng (fell 1.61%) and Straits Times (fell 1.13%) all the other Asian indices closed in the positive. The maximum gin was made by Taiwan Weighted (up 0.91%)


The European indices were trading deeply in the red while the US Future too were in the negative.


The board of directors of GTN Industries has decided to sell yarn processing and knitting business on slump sale basis as a going concern. The said proposal, in due course, is subject to approval of shareholders, CDR, lending institutions and other statutory authorities as applicable. The stock fell 4.94% to close at Rs 8.46 on the BSE.


The board of directors of Apollo Tyres gave their approval to the management to proceed with requisite approvals and compliances on a transaction with Sumitomo Rubber Industries (SRI) by which SRI may take over Apollo Tyres South Africa (ATSA) including the Ladysmith Tyre plant and Dunlop Brand rights in Africa at a consideration of USD 60 million. The company will retain the Durban plant, through the Holding Company of ATSA, which manufactures Truck and Bus Radial Tyres and Off Highway Tyres. The closing of transaction is likely to take place in next 4 months. Apollo Tyres rose 0.11 to close at Rs 90.30 on the BSE.


RTI online: Portal rejects application calling a successful transaction as failed!

Enthusiastic post graduate students of Pune’s MIT’s School of Government filed online RTI at the Department of Agriculture & Cooperation on 23rd May only to be disappointed as rejected their application citing ‘payment failure’

Besides Indians who reside abroad, now Indians can file Right to Information (RTI) application online through the government’s web portal to five public authorities: Department of Personnel and Training (DoPT); Ministry of Home Affairs (MHA); Department of Agriculture and Cooperation; Department of Animal Husbandry, Dairying and Fisheries; Department of Consumer Affairs and; Department of Food and Public Distribution.

Pune-based MIT’s School of government, a post-graduate course on politics and governance for potential politicians, where I teach RTI, decided to conduct a practical lesson on filing online application. The DoPT had on 23rd May opened online filing of RTI application for citizens to the above mentioned five departments/ ministries.

The students decided to file RTI online to the Department of Agriculture and Cooperation. As a test application, they decided to request information on the quantity of food grains that went rotten in its various warehouses across the country. The period for which information was sought was 1 January 2012 to 31 December 2012.

We followed the step by step instructions as is mentioned on the portal. After successfully filing the RTI application, twice the transaction of Rs10 via the State Bank of India (SBI) card of one of the students, failed. Students did not give up and much to their delight, the third time, the transaction was successful. The proof came in seconds later through an SMS from SBI which stated: “Transaction of Rs10 made in SBI Credit Card xx7902 at RTI Online on 23 May 13.’

However, seconds later, it was a disappointment, when despite the Rs10 having been successfully debited from the student’s SBI Card, this message flashed on the portal: “Sorry due to transaction cancellation/ failure your RTI request could not be filed. Please try again.’’ If the web portal had accepted the application, the students would have received a registration number by SMS and through this number, they could have tracked the status of their RTI application.

I contacted Commodore Lokesh Batra, a leading RTI activist from Delhi who relentlessly fought with the government for facilitating online RTI applications for overseas Indians as well as those in the country. Batra states, “…the DoPT has just yesterday (22nd May) launched the online RTI for five public authorities including Department of Agriculture and Co-operation and you have tried it today. Perhaps they would take some time for synchronisation. I think you should try again after a week or so. Otherwise, hundreds of citizens have been filing RTI online and they have met with success.’’

Filing RTI online is certainly a boon for citizens. Even first appeals can be filed online. However, one hopes the experience is smooth sailing, otherwise cynicism sets in. While, we will give it another try, following are the step-by-step instructions provided by the website which we followed in the classroom:

1.    On clicking at "Submit Request", the applicant has to fill the required details on the page that will appear.

The fields marked * are mandatory while the others are optional.

2.    The text of the application may be written at the prescribed column.

3.    At present, the text of an application that can be uploaded at the prescribed column is confined to 500 words only.

4.    In case an application contains more than 500 words, it can be uploaded as an attachment, by using column "Supporting document".

5.    After filling the first page, the applicant has to click on "Make Payment" to make payment of the prescribed fee.

6.    The applicant can pay the prescribed fee through the following modes:

(a) Internet banking through SBI and its associated banks;

(b) Using credit/debit card of Master/Visa.

7.    Fee for making an application is as prescribed in the RTI Rules, 2012.

8.    After making payment, an application can be submitted.

9.    No RTI fee is required to be paid by any citizen who is below poverty line as per RTI Rules, 2012. However, the applicant must attach a copy of the certificate issued by the appropriate government in this regard, along with the application.

10.  On submission of an application, a unique registration number would be issued, which may be referred by the applicant for any references in future.

11.  The application filed through this Web Portal would reach electronically to the "Nodal Officer" of DoPT, who would transmit the RTI application electronically to the concerned CPIO.

12.  In case additional fee is required representing the cost for providing information, the CPIO would intimate the applicant through this portal. This intimation can be seen by the applicant through Status Report or through his/her e-mail alert.

13.  For making an appeal to the first Appellate Authority, the applicant has to click at "Submit Appeal" and fill up the page that will appear.

14.  The registration number of original application has to be used for reference.

15.  As per RTI Act, no fee has to be paid for first appeal.

16.  At present, an applicant/the appellant can see the following status :

(i) Application filed on..

(ii) Additional fees, if required..

(iii) Appeal filed on..

(iv) Replied on..

17.  The applicant/the appellant should submit his/her mobile number to receive SMS alert.

18.  All the requirements for filing an RTI application and first appeal as well as other provisions regarding time limit, exemptions etc., as provided in the RTI Act, 2005 will continue to apply.


Following are the FAQs derived from

1. To which Public Authority can I file a request?

An applicant who desires to obtain any information under the RTI Act 2005 can make a request through this RTI Online Portal to only the Central Public Authorities of main

Ministries/Departments located at New Delhi initially. In the first phase, this facility is available to make a request to Department of Personnel and Training only.

2. How do I write my application for seeking the information as per RTI Act 2005?

The text of the application may be written in the prescribed column of the form. At present, the text of the application is confined up to 500 characters only in the prescribed column of the form. In case, the text of an application contains more than 500 characters, it can be uploaded as a PDF attachment in the “Supporting Document” column of the form.

3. How do I make the payment for RTI fee?

After filling the first page, a non-BPL applicant has to click on “Make Payment” button for remittance of the prescribed RTI fee.

The applicant can pay the prescribed RTI fee through the following modes:

(i). Internet banking through SBI and its associated banks.

(ii). Using ATM-cum-Debit card of State Bank of India.It may be noted that no RTI fee is required to be paid by any citizen who is below poverty line, as per RTI Rules, 2012. However, the applicant must attach a copy of the certificate issued by the appropriate government in this regard, along with the application.

4Do I get any receipt for online filing of RTI application?

On submission of an application, a unique registration number will be issued, which may be referred by the applicant for any future reference. It may be noted that the application filed through this RTI Online Portal will reach electronically to the “Nodal Officer” of the said Ministry/Department and “Not” to the CPIO of the concerned Ministry/Department. The Nodal Officer will transmit the RTI application, either electronically or physically to the concerned CPIO.

5. What will happen to my application if I select a wrong Public Authority in the prescribed form?

In case the RTI application is not meant for the Ministry /Department which has been selected by the applicant, the “Nodal Officer” of the said Ministry/Department will transfer the application electronically to the “Nodal Officer” of the concerned main Ministry/Department located at New Delhi, under section 6(3) of the RTI Act.

6. Will I be informed about the additional fee (if any) is required to pay?

In case additional fee representing the cost is required for providing information, the Nodal Officer will intimate the same, which can be viewed by the applicant through ‘View Status’ option in the RTI Online Portal and an e-mail alert will be sent to the applicant for the same.

For submitting the additional fee online, the applicant needs to use the option ‘View Status’ in the RTI Online Portal and on providing the registration number of the request option for ‘Make Payment’ will provided.

7. How do I file an appeal with First Appellate Authority?

For making an appeal to the first Appellate Authority, the applicant has to select the option “Submit First Appeal” in the RTI Online Portal and fill up the form that will appear.

The registration number of original application may be used for the reference.

The appeal so filed through this RTI Online Portal will also reach electronically to the Nodal Officer of the concerned Ministry/Department and Not to the first Appellate Authority.

The Nodal Officer will transmit the first appeal to the concerned First Appellate Authority (FAA), either electronically or physically.

8. Do I need to make any payment for filing an appeal?

As per RTI Act, no fee has to be paid for first appeal.

9. Do I get any SMS from RTI Online Portal?

Though optional, the mobile number can be provided by the applicant/ appellant in order to receive SMS alerts



Veeresh Malik

4 years ago

Thank you for this article and glad to tell you that many more Public Authorities have been added to the list where online paperless applications and responses can and are being filed.


4 years ago

Is there any mumbai based RTI activist ?


4 years ago

How can I cancel a rti which has been filed online ?

upendra vikram

4 years ago

rti on line form is not available the nation is being mocked

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)