India has allowed five domestic private banks to import gold, in what sector officials believe could be a significant step towards the easing of tough curbs on the metal imposed last year to cut the country’s trade deficit, William Wesnofske reports.
The move comes with the hope of gold supplies being boosted, and resultantly lowering metal metal. The Reserve Bank of India has authorized gold imports by HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank.
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Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation, said "supplies will be smooth from now and I think premiums will come down."
In July, the Indian government enforced an 80/20 rule, making it mandatory to export a fifth of all gold imports. It is assumed that this move is the beginning of further easing this 80/20 rule.
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