RBI tightens gold import rules
22 Jul 2013
The Reserve Bank of India (RBI) has extended the curbs on gold imports by banks and other nominated agencies by making it mandatory that at least a fifth of the gold imported should be re-exported and that supplies should be restricted to jewellery makers.
RBI said it had reviewed its earlier instructions on gold imports and has consulted the government before making a decision to ''rationalize the import of gold in any form/purity including import of gold coins/dore (bars) into the country.''
The RBI's move is aimed at reining in the country's record high current account deficit by taming demand for the yellow metal.
RBI had earlier imposed certain restrictions on the import of various forms of gold by nominated banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs importing gold for use in the domestic sector.
''Nominated banks or agencies will ensure that at least one fifth of every lot of import of gold (in any form/purity, including import of gold coins/dore) is exclusively made available for the purpose of export,'' RBI said in its new directive.
RBI said banks/ agencies need to retain a fifth of the imported gold in customs bonded warehouses, and will only be able to further import gold after exporting at least 75 per cent of the gold from those warehouses.
RBI said importers of any form of gold should make available gold in any form for domestic use only to entities engaged in jewellery business/bullion dealers supplying gold to jewellers.
RBI has in a notification issued to nominated banks/ agencies asked them to ensure that they comply with these instructions while effecting the foreign exchange transactions put through by/for their clients.
The instructions will, however, not apply to import of gold by units in the SEZ/EOUs / star trading houses who would import gold only for the purpose of exports, it added.
India's current account deficit hit a level around 4.8 per cent of its gross domestic product in the fiscal year that ended March 2013, amidst rising imports of oil and gold.
