RBI puts brake on banks to import gold

Subscribe to GoodReturns
For Quick Alerts
Subscribe Now  
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts
    RBI puts brake on banks to import gold
    With gold imports putting pressure on the current account deficit, the Reserve Bank of India on Monday imposed restrictions on import of the yellow metal by banks.
     

    "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.

    PTI

    Read more about: gold imports rbi
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more