FinMin asks public sector banks to not sell gold coins

The central bank has also taken a number of steps to cut down gold imports

To curb the demand for gold, the finance ministry has asked public sector banks not to sell gold coins to customers. At a meeting this morning, Finance Minister P Chidambaram, with other finance ministry officials, conveyed this to senior managements of public sector banks.

“However, there is no written directive,” a public sector bank’s chairman and managing director, present at the meeting, said. “Hopefully, gold ETFs (exchange-traded funds) will be encouraged, where units are in dematerialised form. Custom duties on gold have been increased.

Together, I hope gold imports will come down. All I can do is plead to the people of India that we cannot afford too much import of gold,” Chidambaram said.

The Reserve Bank of India (RBI) has taken a number of steps to cut gold imports. It has advised banks not to sell gold coins aggressively. Recently, however, RBI Governor D Subbarao had clarified the central bank hadn’t asked banks to stop selling gold completely.

Earlier, RBI had tightened gold import norms by imposing restrictions on banks and nominated agencies such as premier and star trading houses. It had said these entities could only import gold on a consignment basis to meet the genuine needs of gold jewellery exporters.