|Chennai||Rs. 27770.00 (0.07%)|
|Mumbai||Rs. 29200.00 (2.31%)|
|Delhi||Rs. 27900.00 (-0.36%)|
|Kolkata||Rs. 28270.00 (1%)|
|Kerala||Rs. 27050.00 (-0.37%)|
|Bangalore||Rs. 27550.00 (1.66%)|
|Hyderabad||Rs. 27770.00 (-0.14%)|
State Bank of India (SBI) chief has asked the Reserve Bank of India (RBI) to allow the lender to buy back gold. This is not allowed at present, though banks are allowed to sell gold coins.
In an interaction with Subir Gokarn, deputy governor of RBI, at the annual banking conclave, BANCON, SBI's Chairman Pratip Chaudhuri suggested such a move would improve market liquidity. "Today all the banks are selling gold but RBI does not allow them to buy back their own gold. Suppose somebody has taken gold from my bank and the same gold, without opening the seal, comes back, banks are not allowed to buy it back. What would be the underlying thoughts? It is impeding the liquidity of gold holdings," Chaudhuri asked the regulator, in the interaction which followed by a speech by Gokarn on the country's gold import problem.
In 2011, the country imported 969 tonnes of the yellow metal, according to World Gold Council data. The government had increased the tariff to discourage imports. Earlier this year, RBI had also announced a panel under K U B Rao, a senior official, to look at the issue of lending by non-bank financial companies against gold and to assess the trends in demand for gold loans.
The group was also examining the factors influencing gold imports and was to analyse the implication of gold imports for external and financial stability. The report will be in the public domain shortly.
Gokarn said, "Gold is being demanded for many reasons. There are many factors that are driving it and there is no reason at all to deny in any way investors from accessing it. But it is creating some macroeconomic stresses and so the challenge is to find ways to replicate the financial characteristics of gold without necessarily causing physically importing."
RBI has mooted alternative channels for investment which will fetch gold-like investments to discourage physical investment in gold. According to Gokarn, the proposed instruments are a modified gold-backed scheme, gold linked accounts, gold accumulation plans and gold pension plans.
In the modified gold backed scheme, it is proposed that physical gold be deposited for a definite period, with interest payment. The gold-linked account, is proposed to be a non-interest bearing account and the gold accumulation plan will be similar to the systematic investment plans of mutual fund schemes, in which the SIP will buy a small quantity at regular intervals. The gold pension plan, proposed for senior citizens, will have the same as a reverse mortgage product of properties.
RBI had earlier directed banks not to give loans for purchase of gold in any form, including primary gold, bullion and jewellery, to dissuade people from speculative activity.