"We do not want banks to aggressively market gold. We do not want that to become a business. Gold loans are a very small part of the banking business," he said on the sidelines of a financial inclusion conference here. In a bid to curb demand for gold, the RBI yesterday imposed restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs and mutual funds. Saying the route of buying gold for the purpose of genuinely saving should be available to the people, Subbarao emphasised that investment in the financial sector is good for the economy. He also noted that the attractiveness of gold is a "consequence of high inflation".
Talking about the need for financial inclusion, he said the RBI had a two-fold responsibility as a regulator and public policy institution and it was important to make people understand viable alternative avenues of investment as part of financial inclusion to wean them away from such schemes.
Subbarao said there were many "unscrupulous schemes" which did not come under regulatory purview which lure people with exorbitant rates of interest. The conference was attended by some 90 delegates comprising rural customers, business correspondents and rural branch managers of commercial banks from Gujarat and Chhattisgarh. PTI