The latest announcement of Reserve Bank of India (RBI) permitting authorised banks trading in gold to consider their gold and forex limits as one has raised hopes of more relaxation of the restrictive gold policy of the apex bank. The focus has shifted back to the failed Gold Deposit Scheme launched in 1997 which bankers said needs to be relooked at if the potential of the yellow metal in the retail segment is to be unlocked and gold is to be made a tradable product, through paper gold (gold certificates issued by banks and corporates that can be listed and traded on futures exchange). As of now, the bullion banks act only as consignees of their clients and act as brokers for the TT bars buying from overseas and supplying to their local clients. Thus, a handful of them do offer gold loans butt the vast potential of the retail market has been left untapped. Even the State Bank of India (SBI) failed in its efforts and barely managed to mobilise merely six tonne of gold under its maiden gold deposit scheme. At the time of the launch in 1997, the SBI had said it aimed at mobilizing 100 tonne.
NSTL
