- FM Nirmala Sitharaman's statement in Lok Sabha during Budget session, Feb 10, 2025.
- Action to be taken against banks and NBFCs for violating gold auction norms.
On Monday, February 10, 2025, Finance Minister Nirmala Sitharaman addressed the Lok Sabha during the Budget session in New Delhi, stating that strict action will be taken against banks and NBFCs for any violations of established procedures in the gold auction process, particularly when borrowers default on gold loans.
Finance Minister Nirmala Sitharaman spoke during Question Hour in Lok Sabha. NBFCs and Scheduled Commercial Banks (SCBs) are governed by similar rules. Strict and well-defined processes are in place for gold auctions by banks and NBFCs.
Banks and NBFCs must issue multiple notices to borrowers before proceeding with an auction. If a borrower fails to repay, banks or NBFCs will be compelled to auction the gold.
Sitharaman emphasized that even during the auction process; there are clear procedures and strict protocols in place. She stated, "If these processes are violated, it is our responsibility to take action. However, if the established norms are followed by the banks, I am open to addressing specific instances where violations occur and will take appropriate action."
The minister was addressing questions from DMK leader Kanimozhi Karunanidhi about the auctioning of gold by entities in cases of loan defaults. In response to Congress leader Manish Tewari’s query, she stated that the demand for gold in India has not declined; rather, it continues to rise.
She also added, "In India, especially among households and small businesses, investing in gold is common as it is considered a secure and liquid asset. This sustained interest is seen not only among households and small businesses but also among women across the country."
