RBI says no ban on gold selling by banks
Moneylife Digital Team 29 May 2013

The Reserve Bank of India while ruling out a ban on the sale of gold by banks has asked lenders to refrain from aggressively selling the precious metal and related products

D Subbarao, the governor of Reserve Bank of India (RBI) on Wednesday ruled out a ban on gold selling 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 told reporters on the sidelines of a financial inclusion conference in Pune.


In a bid to curb demand for gold, on Tuesday the central bank imposed restrictions on banks and non-banking finance companies (NBFCs) for providing loans against gold coins as well as units of gold exchange traded funds (ETFs) and mutual funds.


Subbarao said there were many "unscrupulous schemes" which did not come under regulatory purview which lure people with exorbitant rates of interest.


He also noted that the attractiveness of gold is a "consequence of high inflation". Saying the route of buying gold for genuinely saving should be available to the people, Subbarao emphasised that investment in the financial sector is good for the economy.

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