MUMBAI: The Reserve Bank of India has set up a committee to study Indian household financing pattern and why they spend large sum of money on gold+ .

The panel will look at various facets of household finance in India and to benchmark India’s position vis-a-vis both the peer and advanced countries, it said in a statement on Thursday.

The panel headed by Tarun Ramadorai, Professor of Financial Economics, University of Oxford will have representation from financial sector regulators, Sebi, Irdai, PFRDA apart from RBI.

It will consider “whether, how, and why the financial allocations of Indian households deviate from desirable financial allocation and behaviour (eg, the large household allocation to gold)”.

The committee has also been asked to benchmark the current depth of household financial markets in India vis-a-vis those in other major world markets and to identify areas of priority for growth and change.

To characterize and evaluate households’ demands in formal financial markets (for assets such as pensions as well as liabilities such as home loans) over the coming decade, is another key term of reference given to it.

RBI further said that the panel will evaluate the “design of new systems and the redesign of existing systems” of incentives and regulations to encourage and enable better participation by households in formal financial markets.

he terms of reference also include assessing the role of new financial technologies and products (robo-advising, automatically refinancing mortgages) in the cost-effective provision of high-quality and suitable financial products to Indian households while containing risks.

The committee is expected to submit its report by end July 2017.