SBI, BoB seek treatment of gold deposits as part of CRR/SLR

Tags: News
The country's two biggest state-run lenders today pitched for treating a portion of their gold deposits as part of the mandatory cash reserve ratio (CRR) or statutory liquidity ratio (SLR), both of which banks consider as non-productive.

"Is it possible that the regulator can treat a little bit of our gold deposits as CRR or SLR? After all, gold is also a store of value," State Bank of India Chairperson Arundhati Bhattacharya said at a Gem & Jewellery Export Promotion Council banking summit here.

With gold imports having pressurised the current account gap in the recent past, there is a greater need to make use of gold available in the country and make it more liquid, she stressed.

She claimed that SBI is the largest player in the gold deposit scheme segment and is struggling to deploy the entire deposits in productive assets.

"We also find that we are not able to deploy the entire gold that we get. There is really no incentive for us to go ahead and get more of these deposits now so as to make gold more liquid," she said, reiterating her demand.

CRR, at 4 per cent now, is the portion of deposits parked by banks with the Reserve Bank of India that earns no interest, while SLR, at 22.5 per cent, is the amount of deposits to be mandatorily invested in recognised securities such as government bonds and other liquid assets.

However, the average SLR holding in the system is 27 per cent as banks make treasury play a source of boosting bottom lines when there is poor growth in advances or bad loans rise.

Concurring with Bhattacharya, Bank of Baroda Chairman and Managing Director S S Mundra said it "makes sense" to treat a part of banks' gold deposits as CRR and SLR.

"When banks are holding gold, it is of value. I think it makes sense to bring under CRR/SLR. It also fits the larger pattern that ultimately we are talking about unearthing the gold and bringing it to productive sectors in the economy as a whole. The gold that is readily available can be brought under recognition," Mundra told reporters.


  • India’s economic recovery has to be consumption, and not investment, led

    It is well accepted that falling global commodity prices, especially oil, have helped the Indian economy regain lustre in the past year or so.


Stay informed on our latest news!


Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs


Amita Sharma

Smart cities for the smart citizens

The 21st century has been spoken of as the urban ...

Purnendu Ghosh

Too shy people love themselves too much

We are essentially shy people. Our extent of shyness, however, ...

Shona Adhikari

When nature and naturism have a date

DAG Modern has announced its forthcoming exhibition The Naked and ...


William D. Green

Chairman & CEO, Accenture