Shamika Ravi, Member of the Economic Advisory Council to the Prime Minister (EAC-PM)

India should expand gold monetisation beyond traditional gold loans and develop more financial instruments linked to the precious metal to reduce dependence on gold imports and ease pressure on foreign exchange reserves, according to Shamika Ravi, Member of the Economic Advisory Council to the Prime Minister (EAC-PM).

In an exclusive interview with ANI, Ravi said gold in India is already being monetised through popular gold loan products, but there is a need to broaden the range of financial instruments available to households.

On the monetisation of gold, Ravi also clarified that no one was seeking to take away people's gold and that monetisation was already happening through financial products.

"It is already getting monetised. And let me assure you, nobody's taking anybody's gold. The point is, can we design instruments like gold loans, which is, by the way, popular. But we have to now expand that to other kinds of instruments where people's dependence on gold can come down," she said.

According to Ravi, many households continue to rely on gold as a store of value and a safeguard against future financial uncertainty.

"Gold is not just another asset," Ravi said, adding that gold remains deeply linked to social customs, weddings, childbirth and long-term financial security.

She explained that the popularity of gold is also linked to the limited penetration of pensions, insurance and other financial safety nets across large parts of the economy.

As a result, households often view gold as a reliable asset that can be used during emergencies or economic shocks.

Ravi pointed to the growing popularity of gold loans across the country as an example of successful gold monetisation.

"In fact, if you look at the whole business model of Muthoot and Manappuram and all of these, gold loans are their flagship instrument," she said.

Ravi linked Prime Minister Narendra Modi's recent appeal to reduce excessive gold purchases to concerns over India's import dependence.

"The reason the Prime Minister mentioned caution or trying to dissuade people from buying too much gold is that we do buy a lot of gold from outside. So it's right now an effort to reduce the stress on our forex reserves," she said.

However, she noted that any behavioural shift away from gold would take time because of the strong cultural attachment to the metal.

Ravi also spoke about India's efforts to strengthen its domestic bullion ecosystem. Referring to the Reserve Bank of India's decision to bring a portion of its gold reserves back to India, she said there was no obvious reason to store gold abroad when it could be safely held domestically.

She added that the move was also aimed at supporting the development of the bullion market in Gujarat International Finance Tec-City (GIFT City), which is attracting interest from countries in the Middle East and Africa.

The discussion comes at a time when new market-based instruments are being introduced to formalise gold ownership and improve gold market efficiency.

Recently, the National Stock Exchange (NSE) commenced live trading in Electronic Gold Receipts (EGRs), a new instrument designed to facilitate transparent and efficient gold trading.

An Electronic Gold Receipt is a dematerialised security representing ownership of physical gold deposited with a SEBI-registered vault manager. Unlike Gold Exchange Traded Funds (ETFs), EGRs provide direct ownership of underlying physical gold and can be converted into physical gold through a prescribed process.

Every EGR is backed by corresponding physical gold stored with SEBI-registered vault managers. The instrument can be held and traded in demat form on stock exchanges like any other security.

Published on June 3, 2026