Selling less gold coins may not reduce consumption: SBI chief

Kolkata, May 18 (IANS) State Bank of India (SBI) chairman Pratip Chaudhuri Saturday said the central bank’s request to banks not to aggressively sell gold products may not lead to a reduction in consumption and greater steps are required to check the demand for the precious metal.

On the back of huge gold imports, the Reserve Bank of India (RBI) earlier suggested that banks should be less active on selling gold coins at their branches, seeking to check demands for gold.

“I don’t know whether it would lead to reduction in consumption. Because in India there is such a fascination for gold,” Chaudhuri said here.

“If you discourage banks from selling, you can do that, but what spots people from going to the jewellery shops and banks so long as attraction for gold remains in India,” he averred.

With gold imports putting pressure on the current account deficit, the RBI also tightened the screws on imports of the yellow metal by restricting banks to import bullion on a consignment basis only to meet genuine needs of exporters of gold jewellery.

The Indian government has earlier also taken steps like hike in import duty to restrict gold imports.

“Gold, I think, is deep in our psyche and to take people away from gold, greater steps are needed,” the SBI head added.

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