“Gold should be made more liquid,” says SBI Chief Arundhati Bhattacharya
In order to revive the much stressed gems and jewellery sector, buying and selling of gold must be freely done thereby making it more liquid, said SBI Chief Arundhati Bhattacharya at the a Gem & Jewellery Export Promotion Council banking summit in Mumbai. “Banks can sell gold coins but can’t buy them. What is the way in which both buying and selling can both happen because the moment something can be sold and not bought, you are creating a demand which you cannot meet from within the country. The actual buying and selling has to occur much more freely in order to ensure we don’t keep buying gold and putting it aside because it is not a saleable commodity except in crisis and that the gold needs to be more liquid.
The industry needs to ensure that whatever price the gold jewellery is bought at, it must be sold at the same price and see to it that these practices are put into place wherever gold is being sold. Banks find it difficult to deploy a lot of idle gold into productive assets. So what is the incentive for us to go ahead and get more such deposits so as to make gold more liquid? Therefore, maybe is it possible at all for the regulator can look at allowing us to keep a little bit of this gold as CRR or SLR. After all gold is also a store of value…instead of cash and government securities, gold could also be made a part of CRR and SLR.”