RBI lifts curbs, permits select trading firms to import gold

Tags: News
The Reserve Bank of India (RBI) on Wednesday eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.

The move is expected boost gems and jewellery exports, which has been down over the past six months. Gems and jewellery exports dipped 16 per cent to $2.48 billion in April, the first month of this financial year.

RBI in July last year had imposed severe restrictions on gold imports in order to check burgeoning current account deficit and sliding rupee.

The central bank had tied imports with exports and prescribed a 20:80 formula. This facility was available to select banks only and other entities were barred from importing the metal.

“Star trading houses/premier trading houses (STH/PTH), which are registered as nominated agencies by the Director General of Foreign Trade (DGFT), may now import gold under the 20:80 scheme,” RBI said in a notification.

Under the 20:80 scheme an importer has to ensure that at least one-fifth, or 20 per cent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.

The decision to ease the restriction follows representations from jewellers, bullion dealers, banks and trade bodies.

“Taking into account such representations and in consultations with the Government of India, it has been decided to modify the guidelines for import of gold by the nominated banks/agencies/entities,” RBI said.

The revised guidelines have come into force with immediate effect. The eligible star trading houses and premier trading houses, however, will have to follow certain conditions.

As part of easing curbs, the central bank in March had allowed five more banks to import gold under 20:80 scheme.

The CAD, which had touched a record high of $88.2 billion or 4.8 per cent of GDP in 2012-13 is estimated to have come down to below $32 billion or 1.7 per cent of GDP in 2013-14. The rupee has strengthened to sub-59 level against dollar from a high of nearly 69 in August 2013.

EDITORIAL OF THE DAY

  • Mergers apart, Sebi must also allow fund houses to offer diverse products

    The Securities and Exchange Board of India’s (Sebi’s) reported push for merger of open-ended mutual fund schemes is a logical step, as there is li

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Arun Nigavekar

Can Hefa actually become a reality?

The ministry of human resource development (MHRD) is actively wo­rking ...

Rajgopal Nidamboor

Creativity is that divine luminosity

Creativity or ingenuity, isn’t a licence limited to ‘functioning’ minds ...

Dharmendra Khandal

No one's getting rich overnight by poaching

We often read in newspapers that tiger skin worth Rs ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture