The World Gold Council (WGC) said the RBI’s decision to lift a ban on import of gold coins and medallions by banks and allowing them to import gold on a consignment basis was a right move.
“These are important clarifications in the right direction, following removal of 80:20 import restriction and definitely positive for the industry, restoring previous position. It is the right time to look at all aspects of gold policy with a longer term perspective, going beyond just import policy and incremental changes,” said Somasundaram PR, managing director, WGC India.
“The focus of the government must be on making gold a smoothly fungible asset in hands of the millions of households,” he said.
The Reserve Bank of India (RBI) said in a circular Feb 18: “Nominated banks are now permitted to import gold on consignment basis. All sale of gold domestically will, however, be against upfront payments. Banks are free to grant gold metal loans.”
“While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed,” it said.
However, the RBI has clarified in the circular: “The obligation to export under the 20:80 scheme will continue to apply in respect of unutilised gold imported before Nov 28, 2014, that is the date of abolition of the 20:80 scheme.”
With this decision the RBI has taken the situation as was before July 2013 when nominated banks could import gold just by showing delivery and they did not have to show the end-use.