RBI allows jewellery exporters to avail credit to import gold
Updated: Jun 29, 2013 02:36:21pm
Mumbai, Jun 29 (KNN) In order to boost jewellery exports, the Reserve Bank of India (RBI), according to a statement issued earlier this week, has permitted jewellery exporters to avail loans from banks and other institutions to import gold.
However, it directed banks to ensure that bank credit was made available only to entities that had jewellery export business.
“Import of gold on loan basis may, however, continue to be allowed since the scheme envisages that the nominated banks/nominated agencies can import gold on loan basis for on-lending only to the exporters of jewellery in sync with the non-applicability of the above restrictions to exporters of gold jewellery," RBI said on Friday.
In the wake of cutting gold imports in order to reduce the country's current account deficit, RBI had banned import of the yellow metal earlier this month.
Gold and silver imports rose nearly 90 per cent to USD 8.4 billion in May. Cumulatively, in April-May the import of the precious metals stood at USD 15.88 billion.
Gold import has been a major cause of worry as it widens the current account deficit (CAD), as its entire needs due to very high demands are fulfilled only through imports. CAD reached a record high of 4.8 per cent of GDP in 2012-13 on widening of trade deficit.
Earlier this month, RBI banned import of gold by domestic consumers through bank credit and said any import order should be backed with 100 per cent margin money.
The dealers however feared that the move would hurt the retail jewellery trade and encourage smuggling.
The government has hiked import duty on gold three times in a year and recently raised it by 2 per cent to 8 per cent to curb demand.
Earlier, on May 13, RBI had restricted gold imports on consignment basis by banks. (KNN)
However, it directed banks to ensure that bank credit was made available only to entities that had jewellery export business.
“Import of gold on loan basis may, however, continue to be allowed since the scheme envisages that the nominated banks/nominated agencies can import gold on loan basis for on-lending only to the exporters of jewellery in sync with the non-applicability of the above restrictions to exporters of gold jewellery," RBI said on Friday.
In the wake of cutting gold imports in order to reduce the country's current account deficit, RBI had banned import of the yellow metal earlier this month.
Gold and silver imports rose nearly 90 per cent to USD 8.4 billion in May. Cumulatively, in April-May the import of the precious metals stood at USD 15.88 billion.
Gold import has been a major cause of worry as it widens the current account deficit (CAD), as its entire needs due to very high demands are fulfilled only through imports. CAD reached a record high of 4.8 per cent of GDP in 2012-13 on widening of trade deficit.
Earlier this month, RBI banned import of gold by domestic consumers through bank credit and said any import order should be backed with 100 per cent margin money.
The dealers however feared that the move would hurt the retail jewellery trade and encourage smuggling.
The government has hiked import duty on gold three times in a year and recently raised it by 2 per cent to 8 per cent to curb demand.
Earlier, on May 13, RBI had restricted gold imports on consignment basis by banks. (KNN)
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