Squeeze on gold

In 1963, when then finance minister Morarji Desai banned gold futures, as part of the Gold Control Act, members of the Bombay Bullion Association didn't know what hit them.

In the crisis that followed, the association had to sell its front building at Zaveri Bazaar to pay for its members' losses.

The Gold Control Act was in place between 1963 and 1990. It was implemented following the Indo-China war, owing to a felt need to control foreign exchange outflows.

The Act allowed individuals and families to only hold up to two and four kg of gold, respectively and only in the form of jewellery. One required a licence to open a jewellery shop or make jewellery.

Bullion analyst Sanjiv Arole says: "It is estimated Mumbai had about 150 jewellery shops during the days of the Gold Control Act; most of those were in and around Zaveri Bazar, in the south of the city. Now, there is a shop in every corner."

In the initial years of the Act, only 14-carat gold jewellery was allowed to be sold.

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