Mumbai, May 21: The Reserve Bank of India today eased gold import norms by allowing select trading houses to procure the yellow metal under the 20:80 scheme, which makes mandatory export of 20 per cent of imported gold.
The RBI had barred trading houses from importing gold last year to check the country’s burgeoning current account deficit (CAD). Measures taken by the RBI and the government have dented demand for gold in India and led to a rise in smuggling.
With CAD — the difference between outflow and inflows of foreign currency — narrowing down considerably, the central bank has taken steps to relax the restrictions on gold imports. In March, the RBI allowed five banks to import gold under 20:80 scheme.
The scheme states that an importer has to ensure that at least one-fifth, or 20 per cent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use in the jewellery business, bullion market or banks.
Today, the apex bank took a step forward by allowing star and premier trading houses, which are registered as nominated agencies by the Director General of Foreign Trade, to import gold.
In a circular today, the RBI said it had received representations from jewellers, bullion dealers, banks, and trade bodies to rationalise the guidelines for the import of gold.
The revised guidelines will come into effect immediately. However, the eligible star trading houses and premier trading houses will have to follow certain conditions.
The RBI said only those trading houses who have imported gold prior to the introduction of the 20:80 scheme will be permitted to procure the yellow metal.
Bullion circles said the move would marginally improve availability and could lead to softening of premiums.
The RBI permitted nominated banks to give gold metal loans to domestic jewellery makers out of the 80 per cent of imports left for domestic use.