Reserve Bank of India governor Duvvuri Subbarao expressed concern that high inflation was forcing people to indulge in buying gold rather than deositing funds with banks.
The government has announced several measures to discourage people from buying gold and prodding them to invest in financial instruments.
Deposits were up 11.2% in the first 10 months of financial year 2012-13, compared with 11.5% in the year-ago period.
Meanwhile, finance ministry’s chief economic adviser Raghuram Rajan said that the record high current account deficit (CAD) is the country’s biggest concern.
CAD widened to a record high of 5.4% of GDP in the September quarter as export growth slowed more sharply than imports, with a similar gap expected in the December quarter likely to prolong weakness in the rupee.