Monday, 5th July 2004 (2882 views)

The Associated Chambers of Commerce and Industry of India (Assocham) has urged the Reserve Bank of India (RBI) to allow banks to offer gold-backed investment products and gold loans.

Assocham wants to see the country emerge as a regional gold trading hub and has conducted a survey of gold requirement in the domestic market to back up its claims.

"Investment in gold is considered the safest route which brings in the highest return to its investors. Since it is not convenient for average households to park their funds with jewellers for buying gold, banks should be permitted to effectively undertake the job," the industry lobby group said.

"In view of the rising demand for the yellow metal among Indian households and with most of the banks having surplus liquidity, if the banks are permitted to invest in gold-backed products, it will benefit not only the bankers but also average investors."

Assocham claims there are several leading commercial banks that have been seeking RBI's approval for investing in gold-based investment products and the organisation is also urging the RBI to encourage banks to offer gold loans to jewellers.

Extension of commercial loans, both on long-term and short-term basis, to jewellers of repute and credibility would enable them buy gold to fulfil the increasing craving among Indian households, both in higher and upper middle class segments, the chamber insists.

India is the largest importer and consumer of gold. Gold demand in India was estimated at 588 tonnes for 2002-03 and, despite a steep rise in gold prices, there has been a continuing growth in Indian demand.

 

« Back to Gold News stories

 

The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.