Reliance Capital becomes first company to suspend gold sales

Reliance Capital has suspended the sale of physical gold and gold savings fund, and any kind of financing against the yellow metal.

In a press statement issued by the company, it has said the decision is to support the government's efforts to minimise gold import which is 'hurting the country's economic interest'.

The company had sold more than 2,200 kg of gold in 2011-12, a jump of 54% from the previous year. It manages Rs 2,300 crore under its gold savings funds, a fund of fund which invests in Reliance gold ETF.

The suspension, however, would not affect existing systematic investment plans (SIPs) in the Reliance Gold Saving Fund.

"We sincerely hope that all stakeholders across business, trade and industry will act in a responsible manner to minimise gold imports that have placed an unbearable burden on the current account deflclt (CAD), and are severely hurting the country's growth prospects" said Sam Ghosh, CEO, Reliance Capital.

Gold and silver imports rose to around $8.4 billion in May from $7.5 billion in April. India's trade deficit increased to $20.1 billion in May from $17.8 billion in April 2013.