Reserve Bank of India Takes More Steps to Curb Gold Imports

(IDEX Online News) – The Reserve Bank of India (RBI) has taken further steps to reduce gold imports which have created a record high current account deficit.

The RBI has demanded that all nominated banks and agencies export at least 20 percent of every batch of imported gold in all forms, while domestically making it available only for jewelers.

According to the new RBI guidelines, banks must keep 20 percent of their imported gold in customs bonded warehouses, and can only import more gold after exporting a minimum of 75 percent of the gold from the warehouses.

Last month, the RBI forbade credit transactions for gold imports unless intended for jewelry to be exported.

The government earlier this in June raised duty on gold to 8 percent from 6 percent after demand for the yellow metal soared in May to around 162 tons – approximately double the average monthly level.

It was the second time this year that the government has raised tax on gold – after increasing it to 6 percent from 4 percent in January.