With the rupee plunging to abysmal depths, everybody seems to be contributing to salvage some pride for the rupee, by preventing consumption of gold. Remember, if there is more gold consumption, there is more dollar outflow, putting pressure on the Indian rupee. Take a look at how associations, government, RBI and corporates are contributing to reduce gold consumption.
Cash and carry of gold to go, says RBI
In early June, the RBI said that all imports of gold would have to be on 100 per cent cash basis. This meant that credit from suppliers was barred and also from bullion banks.
Import duty on gold hiked
To further restrict gold imports the government hiked duties from 6 to 8 per cent. It's a different matter that industry has been arguing that raising prices frequently would result in smuggling causing loss to the government.
Focus on gold bars and coins
The All India Gems and Jewellery Trade Federation has suggested to its members to stop selling gold bars and coins. This forms a substantial part of their business.
Rcap says that they are committed to support govt and RBI
"Reliance Capital is committed to support all policy objectives of the government and the RBI. We sincerely hope that all stakeholders across business, trade and industry will act in a responsible manner to minimise gold imports," said Sam Ghosh, chief executive officer, Reliance Capital.
Rural masses targetted
The RBI has informed rural regional banks that they can no longer provide loans against gold jewellery and coins.
No loans against Gold ETFs
The RBI says banks will not be allowed to give loans against units of gold exchange-traded funds and gold mutual funds in a mode aimed at further cutting advances against gold.