Central bank moves to break India's golden habit

Central bank moves to break India's golden habit

When 19-year-old Fathima Hussain got married, she was shocked to discover that her father, a well-to-do businessman, had given her only gold-plated jewellery and coins for her wedding.

The Indian bride was so incensed at not getting pure gold gifts that she filed a police complaint against her father a month ago.

"I realised after my wedding that the gold was not pure. My parents are well-off and it was a loss of face for me. My husband didn't want me to file a complaint but I felt it wasn't right," said Ms Fathima about her father E.P. Hussain.

Police say the case, now in civil court, is unusual but it is a reflection of how important gold is culturally in India.

"At the time of marriage, parents usually give gold to their daughters... It is a very important tradition," said Mr Jaleel Thottathil, an inspector at Perinthalmanna police station.

India is the world's biggest consumer and importer of gold.

People believe it is auspicious to buy gold during weddings and festivals, and as an investment to tide over rough financial patches.

But it is exactly this practice that the country's central bank wants to break as it tries to keep a lid on gold imports, which are big enough to widen the country's trade deficit and cause "macroeconomic stress", including on the rupee currency.

The central bank is trying to convince people to look at other investments such as bonds.

Last month, it even banned banks from financing gold purchases.

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