RBI to allow gold imports only for meeting exporters needs

The Reserve Bank of India on Tuesday extended the restrictions on the import of gold on consignment basis by banks

The Reserve Bank of India on Tuesday extended the restrictions on the import of gold on consignment basis by banks to all nominated agencies and trading houses to check the alarming trend that has put huge pressure on the current account deficit (CAD).

Any import of gold will now be allowed only for meeting exporters need of gold jewellery,the RBI said in a statement. All letters of credit (LC) to be opened by nominated banks or agencies for import of gold under all categories will be only on 100 per cent cash margin basis, the RBI said in a notification.

Further,all imports of gold will necessarily have to be on documents against payment basis. Gold imports on documents against acceptance basis will not be permitted. These restrictions will not apply to import of gold to meet the needs of exporters of gold jewellery, it said.

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On May 13,the central bank had imposed the restriction on banks importing gold on consignment basis. Besides,it has also put restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs.

The import of the yellow metal during the first two months of the current fiscal are estimated at $ 15 billion. Gold imports by India stood at 860 tonnes in 2012. The World Gold Council expects the countrys gold import to touch a record level at 300-400 tonnes in April-June period.

Govt working on further measures

New Delhi: Even as the Reserve Bank of India put fresh restrictions on high gold imports that have hit the trade deficit,the government on Tuesday said it has further measures to curb demand but said it would take measured actions at present.

RBI has taken measures. We should be careful to note that high gold imports are not unique to India… we have to be careful about not being overly heavy handed, the finance ministrys chief economic adviser Raghuram Rajan said when asked whether the Centre would further hike import duty on gold. ENS

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