The Government today said the Reserve bank of India is ensuring that it buys enough gold to maintain an adequate reservoir and not just a ‘basket’ of currencies.
Replying to the supplimentaries, Minister of Finance, Nirmala Sitharaman said that the US dollar has been the predominant currency reservoir reserved by the RBI. She said the RBI also reserved currencies in different denominations of other countries as well. Earlier, the minister said that there are very stringent processes laid out for the auction of gold loans in case of any Non-Performing Assets (NPA).
She said the non-banking financial companies and the scheduled commercial banks are guided by similar rules as far as repayment of gold loans is considered.
She said that numerous notices are served to bank account holders if they aren’t able to repay loans and are intimated in advance that, in case of eventuality of non-repayment, the lending agency will be forced to go on auction of the gold.
She said that even in an eventuality of the auction, there are well laid out guidelines wherein the account holder is being kept informed. She said that auctions cannot be done without the presence of the account holders, or outside their district.
The Minister further said that auction cannot be done unless evaluation is done and it is also not done at a random rate and there is a benchmark that the NBFC has to do and that cannot be and it cannot be lower than the 80 percent of gold rate over the period of past two-three months.