High inflation prompting more gold buys, says RBI governor

High inflation forcing people to indulge in buying gold rather than depositing funds with banks

Reserve Bank of India Governor Duvvuri Subbarao expressed concern that high inflation was forcing people to buy gold rather than depositing funds with banks.

The government has announced measures to discourage people from buying gold and prodding them to invest in financial instruments. Deposits were up 11.2 per cent in the first 10 months of 2012-13, compared with 11.5 per cent in the same period a year ago.

Subbarao was speaking at the convocation ceremony of a banking and finance institute here.