RBI clarifies on gold import curbs

The Reserve Bank of India (RBI) today clarified that import of gold in the form of coins and medallions by nominated banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs, which hade been earlier permitted to import gold for use in the domestic sector, is now prohibited.

Also, it will be incumbent on all nominated entities to ensure that at least one fifth, ie, 20 per cent, of every lot of gold imported to the country is exclusively made available for the purpose of exports and the balance for domestic use. This will be monitored by customs authorities, and will be implemented port-wise, RBI said.

Further, RBI said, nominated banks/ nominated agencies and other entities should make available gold for domestic use only to the entities engaged in jewellery business/bullion dealers and to banks authorised to administer the Gold Deposit Scheme against full upfront payment.

''In other words, supply of gold in any form to the domestic users other than against full payment upfront shall not be permitted,'' RBI said.

Also, RBI said, nominated banks/agencies/refineries and other entities should ensure that there is no front-loading of imports, particularly in the first and second lots of imports. Such imports should be linked to normal quantities of gold supplied to the exporters by the nominated banks/agencies and should not exceed the highest quantity supplied during any one year out of last three years.

The quantity thus arrived at, however, will not be imported in one or two lots only.

As a thumb rule, imports of more than maximum of two months of requirements of the exporters in a lot would be considered unusual. (For eg, if the gold supplied to exporters by a bank during the last three years was say, 30 tonnes, 40 tonnes and 60 tonnes, respectively, imports should be based on highest of three, ie, 60 tonnes.

Further, import of 50 tonnes  (two months export of 10 tonnes for exports and 4 times the amount for domestic use, totalling 50 tonnes) will be considered unusual. In case of nominated banks not having a previous record of having supplied gold to the exporters they would need to seek prior approval from RBI before placing orders for import of gold for the first lot under the 20/80 scheme.

The 20/80 principle would also apply henceforth for import of gold in any form/purity, including gold dore, whereby 20 per cent of the gold imported should be provided to the exporters. This will be administered and monitored at the refinery level for each consignment at the time of such imports. This will also be monitored by the customs authorities, RBI said.

The refinery should make available for domestic use only to the entities engaged in jewellery business/bullion dealers and to the banks authorised to administer the Gold Deposit Scheme against full upfront payment and sale of gold against any other form of payment shall not be permitted.

Further, the import of gold dore will be permitted only against a licence issued by DGFT.

Any authorisation such as Advance Authorisation/Duty Free Import Authorization (DFIA) should be utilised for import of gold meant for export purposes only and no diversion for domestic use will be permitted.

Entities in the SEZ and EoUs, premier and star trading houses are permitted to import gold exclusively for the purpose of exports only.

Government of India will be issuing separate instructions to the customs authorities/DGFT to operationalise and monitor the above requirements for import of gold.

The above restrictions will come into force with immediate effect, RBI added.