Banks can sell gold in open market

MUMBAI, NOV 8: The Reserve Bank of India (RBI) today said the seven banks that it had authorised to import gold and silver can now import g...

MUMBAI, NOV 8: The Reserve Bank of India (RBI) today said the seven banks that it had authorised to import gold and silver can now import gold for sale in the domestic market in a move to further liberalise gold imports.

The apex bank said the seven banks along with the Special Import Licence (SIL) holders and returning non-resident Indians can import these precious metals for sale in the domestic market without a license and without surrendering their SIL. It may be recalled that the RBI had earlier allowed seven banks to import gold for sale only to exporters, SIL holders and returning NRIs.

The latest move is expected to bring down the prices of gold further and eliminate smuggling of the yellow metal. This is also considered as a precursor to full convertibility of the rupee on the capital account and futures trading in gold, sources said.

This apart, duty for such imports has been allowed to be paid in rupees at the rate of Rs 220 per ten grams of gold and Rs 500 per kilogram of silver.Also, the payment of duty under the special import license window, which was hitherto required to be made under Exchange Earners Foreign Currency (EEFC) accounts, could now onwards be in Indian rupees.

Reserve Bank officials said it was a technical clarification to the changes in the gold policies that were announced by the government since the banks depended on the directive of the central bank.

The seven banks that have been authorised by the RBI are Bank of India, Canara Bank, Indian Overseas Bank, Allahabad Bank, Bank of Nova Scotia, Standard Chartered Bank and ABN-Amro Bank.

Meanwhile, prices of the yellow metal rose further but silver reacted on the bullion market here today. Prices of standard gold rose further by Rs 30 to close at Rs 4235 from yesterday’s Rs 4205 on increased buying coupled with poor arrival, traders said. 22-carat gold also rose by a similar margin and was nominally quoted at Rs 3920 from Rs 3890. Ten-tola gold bar of .999 purity strengthened by Rs 300 to end at Rs 49,500 from Rs 49,200. On the other hand, ready silver of .999 purity, however, opened weak at Rs 6780 and later improved to close at Rs 6800, still showing a fall of Rs 20 over the last close of Rs 6820 due to increased arrival. Raw silver of .916 fineness at Rs 6700 and tenderable silver at Rs 6805 also finished weak from the last close of Rs 6720 and Rs 6825 respectively.