Indian banks propose to use gold deposits as CRR/SLR

June 30, 2014

(SBI) and (BoB), two of the largest  banks of, proposed on Saturday their gold deposits should be allowed to count toward their state-mandated  (CRR) or  (SLR).

, the chairperson of SBI, made the proposal at a Gem & Jewellery Export Promotion Council event held in on Saturday. She said the need for gold deposits to become more has increased because gold import is putting a strain on the country's current account deficit. S. S. Mundra, Chairperson and managing director of BoB, agreed and said it would help bringing gold into the more productive sectors of the economy.

Bhattacharya added SBI has no longer any incentive to run its gold deposit scheme as it cannot fully deploy the assets, noting SBI is the party most involved with gold deposits in India. G. S. Sandhu, Union financial services secretary, also at the event, responded that the government is looking for ways to the gold held by the public, as import of gold can strain the current account deficit and foreign exchange reserves.

Currently, the has set the CRR at 4% and the SLR at 22.5%. SLR is the portion of deposits that must be invested in recognized safe securities and assets.