INTERVIEW-India imports 65-70 T gold in Sept -trade body

NEW DELHI, Oct 3 (Reuters) - India imported 65 to 70 tonnes of gold in September, down from about 100 tonnes in the previous month as the sharp rise in global prices hit demand ahead of the country's peak festival season, a trade body chief said on Friday.

Gold's rise above $800 an ounce in September scared away buyers ahead of the peak season, which starts in September and culminates with the Hindu festival of lights, Diwali, in end-October, Suresh Hundia, president of the Bombay Bullion Association, told Reuters in an interview.

Hundia said Indian banks, which had imported gold anticipating a surge in demand, had been unable to sell about 20 tonnes of gold bought when prices were low.

"For the first time since 1998, the banks are stuck with so much gold," he added.

India imports around 700 to 800 tonnes gold annually, but demand suffered this year due to volatile international prices. ($1 = 46.85 rupees) (Reporting by Biman Mukherji, Editing by Mark Williams)