The upcoming budget session may see a proposal to set up a gold bank under Reserve Bank of India, India's central bank, a report that has been published in the South Indian daily, Malayala Manorama speculated. The proposal can be traced back to the 1992 budget presented in the Parliament, but which eventually gathered dust..............
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It is comforting to see this report. Let me recall the concluding paragraph in my article “Gold management needs a makeover” (Hindu Business Line, April 13, 2012):
INSTITUTIONAL CHANGE
The time is ripe for authorities to think in terms of dedicated professional institutions at the regional/state level, which will handle gold from a banking angle. An apex body should be equipped with linkages for import and export of gold and gold products with borrowing and lending capabilities.
States like Kerala have successfully intervened in other similar sectors like chits/kuris and lotteries, which were also areas of exploitation by vested interests. Private players had to fall in line and function with discipline and self-regulation.
Establishment of ‘Gold Corporations' with state participation could also be debated. Such an institution can act as a depository where the gold possession of individuals now in bank lockers and the pledged gold can find a safe shelter, provided the purity can be ensured, and the ‘Corporation' can find the resources and skill to deal in gold and retain the customers' confidence.
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