"To moderate the demand for gold for domestic use, it has been decided to restrict the import of gold on consignment basis by banks, only to meet the genuine needs of exporters of gold jewellery," the RBI said in a statement.
As per a data released on Monday by the government, gold and silver imports during April 2013 jumped by 138 per cent to $7.5 billion against $3.1 billion in the year-ago period. Due to high gold imports, the country's trade deficit in April widened to $17.8 billion year on year.
Higher trade deficit in turn puts pressure on CAD, which has been described as the biggest risk to the Indian economy by the RBI.
The CAD, which is difference between the outflow and inflow of foreign currency, touched a record high of 6.7 per cent in the October-December quarter on the back of rising oil and gold imports.
The RBI's decision to impose restrictions on gold imports follows recommendations of a Working Group on Gold which had suggested aligning gold import regulations with the rest of the imports for creating a level playing field between gold imports and other imports.
Nominated banks and agencies were permitted to import gold on loan basis, suppliers credit/buyers credit basis, consignment basis, as also on unfixed price basis.
However, bulk of the gold imported is on consignment basis whereby nominated banks do not have to fund these stocks, RBI said.
To restrict gold imports, the government has also taken steps like hike in import duty.
Gold imports into India, the world's largest consumer of the metal, stood at around 830 tonne in 2012-13.