In other words, gold is being promoted as a financial instrument, much like the RBI committee recommended.
The committee recognised the need to convert both rural and urban demand for gold into investment in gold-backed financial instruments through dematerialisation of gold.
Says, Rajiv Anand, MD and CEO, Axis Asset Management Company, "In the past five years, a lot of money has gone into debt, real estate and gold. Around 20-30 per cent of the imported gold is for investment purposes. There is a need to have financial products that will give comparable returns to divert investor's money."
There are some options such as gold ETFs, gold fund of funds, e-gold and others.
Even banks have gold deposit schemes.
However, promotion of these products has been limited.
Mutual funds seldom advertise gold ETFs and banks complain of low storage capacities to accommodate gold deposits.