PAN card requirement be extended to all gold transactions, daily cash limits against gold sale, electronic registry etc. suggests Household Finance Committee
RBI has released the report of the Household Finance Committee. The Household Finance Committee was set up to look at various facets of household finance in India.
The Committee was chaired by Dr. Tarun Ramadorai, Professor of Financial Economics, Imperial college London, with representation from all the financial sector regulators, namely, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA).
The committee has Highlighted the unique aspects of Indian households’ financial decision-making. It has also set out several recommendations on enabling better participation by Indian households in formal financial markets, including a Regulatory Sandbox for assessing the role of new financial technologies and products.
As per the report of the household committee, the average Indian household holds 84% of its wealth in real estate and other physical goods, 11% in gold and the residual 5% in financial assets. Whereas retirement accounts play a very limited role in household balance sheets, even at the top of the wealth distribution.
The committee has noted that gold is a preferred asset for tax evasion purposes. To curb it, the committee has proposed as under: