In a move to curb the demand for gold, the finance ministry has asked the public sector banks not to sell gold coins to their customers.

According to bankers, the view was communicated by the finance minister P Chidambaram and other finance ministry officials at a meeting today in the morning with the top management of public sector (PSU) banks.

Later in the evening, the finance minister told reported that banks have been advised not to sell gold coins.

“Hopefully gold ETFs will be encouraged, where units are in dematerialised form. Custom duties on gold have been increased. Together I hope that gold imports will come down. All I can do is plead to the people of India that we cannot afford too much import of gold,” Chidambaram said at the sidelines of an event.

“It was verbal communicated in the morning today that banks should stop selling gold coins. However, there is no written directive,” said a chairman and managing director of a public sector bank who was present in the meeting.

The Reserve Bank of India (RBI) has also taken a number of steps to cut down gold imports and have advised banks not to sell gold coins aggressively. However, RBI governor recently clarified that the central bank has not asked the banks to completely stop selling of gold.

Eaelier RBI tightened the norms for import of gold by imposing restrictions on banks and nominated agencies, like premier and star trading houses. The central bank has said these entities can import gold on a consignment basis only to meet genuine needs of gold jewellery exporters.

RBI also restricted advances against gold coins per customer weighing up to 50 gms. (Business Standard)