CITY OF LONDON CONTROLLED RESERVE BANK OF INDIA TRIES TO STIFFLE GOLD ONCE AGAIN
The Unhived Mind [UHM]
India’s Reserve Bank further tightens gold import rules
The Reserve Bank of India has tightened the norms for importing gold and for lending against the metal.
Author: Shivom Seth
Posted: Saturday , 04 May 2013
MUMBAI (MINEWEB) – In yet another crackdown on gold imports, the Reserve Bank of India has proposed a fresh set of measures to be mandated at the end of this month, to curb imports and tighten criteria for banks lending against the yellow metal.
In its Monetary Policy for 2013-14 announced on May 3, the central bank has announced that it will restrict gold import on a consignment basis by banks. Henceforth, the RBI has said, imports will only be considered if they meet the genuine needs of exporters of gold jewellery.
Meanwhile, the bank cut its key interest rate by just 0.25% to 7.25% and kept the liquidity enhancing cash reserve requirement unchanged.
The central bank has also put more curbs on lending against gold. Banks would no longer be able to grant advances for the purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, or units of gold exchange traded funds and units of gold mutual funds.
Banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks.
The apex bank has also restricted the facility of advances against the security of gold coins per customer to gold coins weighing up to 50 gram. Henceforth, customers cannot avail themselves of loans against gold coins that weigh more than 50 grams.
With the country termed the world’s largest net gold importer, the outflow of dollars has weakened the value of the rupee. Banks say the rupee has fallen 3.4% since October.
Given the steep fall in gold prices and the resultant risks to the system, the apex bank is keen to wean the public away from investing in gold.
In FY12, gold imports constituted nearly 30% of the trade gap at $60 billion.
In an earlier document detailing the supply management measures, the apex bank had said there was a need to recycle the considerable domestic scrap gold. It said it was also looking into imposing export obligation on bulk gold importers.
theunhivedmind on May 6, 2013 at 12:43 am said:
Gold jewellery imports to India may slide to $1bn
From $4.5bn in March 2012, India’s gold jewellery imports could slide to just $1bn this fiscal, given restrictive measures on Thailand gold imports.
Author: Shivom Seth
Posted: Thursday , 02 May 2013
MUMBAI (MINEWEB) – With the US and Japanese markets expected to bounce back, India’s gems and jewellery exports are likely to grow by 15% this fiscal, according to India’s Gems and Jewellery Export Promotion Council.
However, India’s gold jewellery imports are expected to slide to $1 billion this fiscal, from the $4.5 billion it clocked last year.
“The US and Japanese jewellery markets are expected to bounce back with an estimated 5% growth, while China will remain stable at 10% growth,” Council Chairman Vipul Shah said.
India’s gold jewellery imports from Thailand which dropped to $95.48 million in the first three quarters of this fiscal, is set to slide further, officials said.
With the Indian government suspending gold jewellery imports from Thailand last month, Council officials at the media briefing in Mumbai said gold jewellery imports have come down substantially from the Asian neighbour.
India’s gold jewellery imports jumped to $4.5 billion in 2012 from $832.2 million a year ago, data from the Council showed.
The Indian government had expressed concern that incoming jewellery from Thailand did not have the 20% added value as stipulated in the foreign trade agreement between the two countries.
Officials from both the countries met last month to discuss the issue and it was agreed that due diligence and verification would be undertaken by Thailand to ensure there is no discrepancy.
Officials added that for the period spanning April to November 2012, gold jewellery imports from Thailand were valued at $92 million.
The government has taken several measures to boost the gems and jewellery sector, officials said adding that such measures included permission to import diamonds on a consignment basis for certification and grading and re-export by specified agencies.