The Reserve Bank of India (RBI) has imposed restriction on the import of gold by banks to curtail current account deficits.
RBI said in a statement: "To moderate the demand for gold for domestic use, it has been decided to restrict the import of gold on consignment basis by banks, only to meet the genuine needs of exporters of gold jewellery.
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"Bulk of the gold imported by nominated banks is on consignment basis whereby nominated banks do not have to fund these stocks."
As per a data released by the government, gold and silver imports during April, 2013 jumped by 138% to US$7.5 billion against US$3.1 billion in the year-ago period.
India’s April trade deficit leapt up more than 72% from March to US$17.8 billion, the government said, after retail customers in went on a spree to take advantage of a correction in global gold prices.
Current account deficit (CAD), which is the difference between the outflow and inflow of foreign currency, touched a record high of 6.7% in the December quarter, driven by heavy oil and gold imports and lower exports.
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By GlobalDataWith RBI banning consignment imports for domestic use, jewellers will have to place orders with banks by paying the margin money, banks would import only after this is done.
