The Reserve Bank of India has modified regulations with regard to import of gold. It has now allowed banks to import gold in bullion form on consignment basis and permitted them to extend gold loans. A release from RBI said importers who have been accredited as ‘Star Trading Houses’ and ‘Premier Trading Houses’ can import gold on ‘documents against payment’ basis without any end use restrictions. The central bank had placed curbs on gold imports a year ago in order to handle the current account deficit crisis, which led to steep fall in the value of the rupee. While the price differential between domestic and international gold will continue, the shortage of gold created due to the restriction will now end. This can lead to a downward trend in gold smuggling. The RBI release, however, said 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. The release also said banks are free to grant gold metal loans.
