RBI tightens rules to curb gold imports
In its annual monetary policy for fiscal 2013-14, the central bank said it will announce detailed guidelines by the end of this month that would help curb gold imports.
“With a view to reducing the demand for gold for domestic use, it is proposed to restrict the import of gold on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery,” the RBI said.
The central bank said the new guidelines would be in line with the recommendations of a working group on gold that has suggested “aligning gold import regulations with the rest of imports with a view to reducing gold imports by creating a level playing field between gold imports and other imports.”
The RBI also proposes to restrict the facility of advancing loan against gold coins to a maximum weight of 50 grams.
As per the regulations, banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks.
However, no advances can be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded funds and units of gold mutual funds.
“While there may not be any objection to grant of advances against specially minted gold coins sold by banks, there is a risk that some of these coins would be weighing much more, thereby circumventing the Reserve Bank’s guidelines regarding restrictions on grant of advance against gold bullion,” the RBI said.
“Accordingly, it is proposed to restrict the facility of advances against the security of gold coins per customer to gold coins weighing up to 50 grams,” it said.