By imposing restrictions on the agencies concerned the Reserve Bank of India (RBI) has further tightened the norms for import of gold. The Central bank has said these entities can import gold on a consignment basis only to meet genuine needs of gold jewellery exporters. Industry experts said the measures announced on June 4 would dampen gold imports, which might come down by 100-120 tonne during the current financial year.
Similar restriction had last month been imposed on banks, which are also allowed to import gold. Following the restriction on banks, there had been a choking of gold supply and a 10-fold rise in premiums charged by importers. The premium over international rates on an ounce of gold rose to around $10 from $1.25-1.75 earlier.
RBI said that it was decided the import of gold on a consignment basis by banks would be restricted to meeting the genuine needs of gold jewellery exporters. It has now been decided to extend the provisions of this circular to all nominated agencies/premier/star trading houses that have been permitted by the government to import gold, RBI said.
The central bank added banks could issue letters of credit for import of gold only on a 100 per cent cash margin basis. This means the importers will have to keep the entire value of imports with banks as cash or in fixed deposits. RBI also said all imports of gold would have to be on a Documents against Payment (DP) basis, and not a Documents against Acceptance (DA) basis. This will mean the importers will have to pay banks before taking physical delivery of gold.
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