Jan Dhan Yojana and monetization of gold

Abstract

Currently Indian households own about 22000 tonnes of gold, worth more than $1 trillion1 .The sheer size of this locked up asset makes a compelling case to investigate the possibility of increasing the monetization of gold. Additionally a significant portion of this asset is held by rural households. However in the case of financial distress, most households use the option of availing gold loans only as a last resort. Even when they do so they are forced to pay exorbitant interest rates to the unorganised sector. This is where the reach of Jan Dhan Yojana can be leveraged to simultaneously accrue the benefits of increased monetization of gold as well as address the financial needs of rural India. This study is an attempt to understand the mind-set of customers, understand their reluctance to part with gold and analyse synergies, if any, between Jan Dhan Yojana and monetization of gold.