In order, therefore, to inspire the trust and confidence of stakeholders, a deposit insurance scheme must satisfy two criteria – first, it must be adequately funded, and second, it must have robust delivery systems in place to effect payments within, if not well within, the assured time.
RBI’s view was that the off-shore high yielding investments as contemplated would be too risky for the institution mobilising gold and there is a risk that it may not be able to service the gold deposited by  BIS Review 21/2002  3  the customers without a loss to itself.