2012-04-17

India's alternative policies to reduce gold consumption

Previously, I said that with the import tax seeming off the table, India would find other ways to cut gold consumption. Today, one such measure was announced, with the central bank limiting bank loans to financial companies that lend to gold buyers.

RBI proposes banks reduce exposure to gold loan cos
The Reserve Bank of India (RBI) has asked banks to reduce their exposure to non-banking financial companies (NBFCs), which have given loans mostly against gold, sending shares of such companies sharply lower.
Expect more because India wants to reduce its trade balance.

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