New Delhi, July 22: The government today said the curbs imposed on gold to contain the current account deficit (CAD) by the previous Manmohan Singh cabinet seemed to have yielded results and were likely to be continue.
In a reply to questions in the Rajya Sabha, finance minister Arun Jaitley said, “The measures taken by the government and the RBI helped contain India’s current account deficit to $32.4 billion in 2013-14 and build up foreign exchange reserves to a level of $316.4 billion on July 4, 2014.” Rising CAD, which dragged the rupee to an all-time low of 68.84 against the dollar on August 28 last year, had been a major concern for the previous government.
Jaitely referred to the steps to restrict gold imports as “harsh”, but added that they “apparently seems to have worked”.
The RBI has relaxed the limit of loan that banks can sanction against the pledging of gold ornaments and jewellery.
On December 30, banks had restricted the loans of up to Rs 1 lakh against a pledge of gold ornaments and jewellery.
“Banks, as per their board approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses,” the RBI said in a notification.