REVISED STANDARD OF RESERVES IN RBI REGARDING GOLD

It is a known fact that the Central Bank of India which is also known as Reserve Bank of India (RBI) stores gold as it is a splendid way of keeping monetary reserves in the country. Indian households have the mentality of accumulating gold as a form of investment as the values of gold never decreases and the same has been opted by the Reserve Bank of India, where they keep gold as their reserves so when inflation happens in our country, RBI can jump in to rescue people who are suffering because of it. And as we know that gold value can be sustained even if there is economic depression, a country can cope up with it.

RBI holds gold, shares and debentures, contingencies, asset development funds, and currencies as their reserves. Previously the reserve percentage for gold was 6.5 per cent but due to the recent changes in the reserve prospectus, RBI has decided to change the percentage of gold reserves from 6.5 per cent to 10 per cent.

And why did RBI take such a huge step is because the economic experts have forecasted that the inflation in September is going to be growing more than necessary in the upcoming days, so the necessary steps were taken and the gold reserves were increases to 10 per cent and in this way, RBI can help the economy in its crisis period of the pandemic

Also, people who are in the business of gold have approached RBI for increase the permitted value in the LTV (loan to value), and if this compel is agreed by the RBI, the companies have forecasted that they will be able to provide the financial requirements for the people of the country who exclusively come from lower or middle-income earning capacity, where why will be able to afford gold as they desire.