India looks to Monetise its Citizens’ Gold reserves
The Indian Government has received several strong representations from its leading financial institutions on ways to monetise the massive store of wealth in the precious metal currently held by its Citizens.
It is an Indian custom that Gold is gifted to a bride on her wedding as a form of security and a store of wealth; many families will start saving the precious yellow metal on the event of the birth of a daughter in anticipation of her wedding. Gold is also a sacred element with a special place in the Hindu religion.
With such a considerable store of wealth in the country, the State Bank of India (SBI) and the Bank of Baroda have said that a proportion of the Gold deposits held by banks should be treated as part of the mandatory Cash Reserve Ratio (CRR) or Statutory Liquidity Ratio (SLR).
A Government Official, the Union Financial Service Secretary GS Sandhu, has made it clear that the Government is actively seeking ways to monetise Gold.
"So much gold is lying idle [within the country]. In some ways if we can monetise this, maybe our imports will come down drastically. Something in that direction will have to be thought of," Sandhu said on 28th June 2014 at an event organised by the Gems and Jewellery Export Promotion Council in Mumbai.
The Gold price rose by over 3.5% in June 2014, peaking close to £780 per troy ounce on Tuesday 24th June.
News source: Mineweb.com.