It is imperative to introduce and popularise gold-linked financial products and thereby discourage buying and stocking of physical gold by investors to curb the current account deficit (CAD) of the country, said a top official of the Reserve Bank of India.
“Given the insatiable lure for gold in the country, it is imperative that we introduce gold-linked products which result in the existing gold in bank lockers getting converted as financial products rather than unabated import of gold,” said G Padmanabhan, the executive director at RBI on Wednesday.
A working group formed by RBI to study and suggest measures to curb gold imports had released its draft report in which the group recommended stricter norms on gold loan companies and innovative gold-linked financial products.
Talking on payments systems in India, Padmanabhan said that banks and non-bank entities must complement each other and ensure services reach to unbanked population through white label ATMs. A white label automated teller machine is operated and maintained by a third party company while the bank backs the financial transactions.
“Banks and NBFCs need to act in tandem in redressing customer grievances relating to failed transactions,” Padmanabhan said. RBI would monitor and intervene whenever necessary, he said.
RBI had issued guidelines on WLAs in June and recently extended the time period for applications to set up such ATMs until January 15. The applications will be processed by June.
Padmanabhan called for a careful and calibrated management of the expected decline in cheque-based transactions and recourse to more electronic non-paper transactions.
The share of electronic transactions has increased phenomenally to 48% in 2011-12 from just 15% in 2003-04, Padmanabhan said.
“It is nonetheless desirable that transactions in electronic form increases at an increasing rate rather than being contended with transactions through cheques increasing at a decreasing rate,” he said.