Wednesday, March 20th 02:37 PM IST

India central bank may ban Gold coin sales by banks

# RBI  # India gold  # NBFC  # gold coin  

RBI early this week said it has undertaken a thematic study in respect of banks that are active in selling gold coins or wealth management products to examine whether there are systemic issues and to plug deficiencies and legal loop-holes, if any.

NEW DELHI(BullionStreet): India's central bank,Reserve Bank of India's move to study gold coin selling by banks is yet another attempt against gold in the world's largest gold consumer,analysts said.

The move is a clear indication that the central bank extending it's fight against gold to another level and likely to prevent banks from selling gold coins in near future .

RBI early this week said it has undertaken a thematic study in respect of banks that are active in selling gold coins or wealth management products to examine whether there are systemic issues and to plug deficiencies and legal loop-holes, if any.

Seeking to check demand of gold, a RBI Working Group had last month proposed a slew of measures like mandatory quoting of PAN numbers for high-value purchases, restriction on gold loans and check on NBFC branches dealing with gold loans.

Besides, it had suggested limits on imports of gold by banks and other government agencies like MMTC and STC, which account for about 56 per cent of the total import of the precious metal.

Gold imports remained a major concern for the regulators and the government as the inbound shipment increased in recent years and were valued at $42 billion in the April-January period of the current fiscal.

The rising gold import is putting pressure on the Current Account Deficit (CAD), which had touched a record high of 5.4 per cent in the July-September period.

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