New Delhi: Reserve Bank of India has allowed Indian banks to import gold in bullion form on a consignment basis and has also allowed them to extend gold loans without any restrictions. The move comes as a mean to curb gold smuggling that has been on the rise recently.
The announcement comes as a relief for the jewelers too. Importers who have been accredited as 'Star Trading Houses' and 'Premier Trading Houses' can import gold on 'documents against payment' basis without any end use restrictions.
The directive issued by RBI on Wednesday eased the restrictions on gold imports that were put more than a year ago to counter the current account deficit that sent the rupee into a free-fall. The new directive will reduce the difference between domestic and international gold prices. The move will bring down the shortage of gold the Indian market is facing and it is also expected to reduce the smuggling.
In its pre-Budget memorandum to the government, the Federation of Indian Chambers of Commerce and Industry had said that export of gold jewellery has seen a 45% dip to $6 billion in the period April 2013 to February 2014 over the corresponding period last year and smuggling had gone up because of quantitative restrictions on the import of gold.
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