RBI Cautions banks on sale of gold

Curbs on loans against gold coins will moderate India's voracious appetite for the yellow metal and the country's huge import bill. Finding gold coins at your neighborhood bank branch may become tougher. The central bank has suggested that bank should not aggressively sell gold products at their branch. This is the latest attempt by the central bank to stem runaway gold imports, one of the key reasons behind the widening trade and current account deficit. RBI is trying to check the import of gold, which is a major contributor to the country's widening trade and current account deficit. Also an anvil are fresh regulations for incentivizing cross -selling of gold, other financial products to curtail money-laundering. The move indicates that RBI will not give long- standing demand by banks to allow them to buy back gold coins. Bankers believe that the move won't be able to reduce gold sales as customers can always approach jewellers for the same. On the other hand jewellers are happy that they will not have to rush to banks for procuring gold as people will sell gold coins in the open market.