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From The Hindu, June 25, 1975: Gold bank on model of unit trust suggested
Bombay, June 24: Mr. Shantilal Sonawala, President of the Bombay Bullion Association, told pressmen here to-day that a 'gold bank' should be set up to mobilise the stock of gold.
He said that the gold bank could be run on the model of the Unit Trust. It could issue a certificate of unit expressed in terms of the quantity of gold deposited with the bank.
'The unit may be say 10 gms of gold. One can purchase this unit against deposit of gold. The bank is under obligation to return this gold either on demand or after a stipulated period as may be discussed and finalised,' he suggested.
'When the bank accumulates such gold, it deposits the same with the Central Bank here in India with the Reserve Bank and gets a loan on liberal terms. The bank invests this loan money in securities, shares or other productive investments on the line of the Unit Trust of India to get a fair return on such capital. The bank declares the dividend to its gold depositors from such earnings,' he added.
Mr. Sonawala also wanted the Government of India to formulate a policy for exporting gold.
From statistics available, he said, India had a stock of 4,500 tonnes equivalent to 144 million ounces of gold valued at Rs. 22,000 crores.
As regards the export of silver, Mr. Sonawala said that about 150 million ounces of silver had been exported out of India till the end of 1974. The figure included official as well as unofficial exports. Thus they had been left with a stock of about 2,600 million ounces of silver.
