You are here
Reserve Bank of India nears panic in its war against gold
RBI Bans Gold Imports with Bank Credit
From The Times of India, Mumbai
Wednesday, June 5, 2013
http://economictimes.indiatimes.com/news/economy/foreign-trade/rbi-bans-...
MUMBAI -- In what traders termed a near-panic reaction to the sliding Indian rupee, the Reserve Bank of India banned import of gold by domestic consumers through bank credit and has made overseas purchase of the precious metal a cash-and-carry business.
The move will nearly cripple the retail jewellery trade and probably lead to higher smuggling into the country, putting the clock back by nearly two decades when socialistic governments restricted gold imports. A day after P. Chidambaram said that "necessarily we will have to check gold imports," the central bank barred gold importers using letters of credit from banks for gold imports.
"All letters of credit to be opened by nominated banks, agencies for import of gold under all categories will be only on 100 percent cash margin basis," the RBI said. "Further, all imports of gold will necessarily have to be on documents against payment basis. Accordingly, gold imports on documents against acceptance basis will not be permitted."
The rupee rose 0.5% to 56.45 to the US dollar after the measures were announced.
... Dispatch continues below ...
Is your gold safe, secure, and guaranteed?
Why storing it in Canada may be right for you
Canada is one of the safest places to store bullion because of its prosperity and economic and political stability. By vaulting your bullion with Sprott Money's Canadian storage program, you guarantee that your metals are stored securely and privately with little risk.
-- We store with Brink's, a private and non-bank storage facility renowned for its integrity, security, and efficiency.
-- Your precious metals will be safe under the protection of Brink's world-class technology and infrastructure.
-- Your precious metals will be fully insured by Brink's and Sprott Money. In the unlikely event of loss, theft, or physical damage to your metal, you will be fully compensated.
Sprott Money is a recognized and trusted name in the precious metals industry. For more information, please visit:
http://www.sprottmoney.com/store-with-us
The Indian rupee has been on a free fall on record a current account deficit, which touched a record high of 6.7% of the GDP in the December quarter. High imports of gold, crude, and coal are blamed for the worsening trade balance. Various steps over the last few months have failed to dampen demand for the yellow metal.
"The effect of this will be shortage of gold in the marketplace," said C. Vinod Hayagriv, managing director at C Krishniah Chetty & Sons, a Bangalore based retail jeweller. "It will raise the cost of doing business as now manufacturers, retailers, and exporters will need to wait after indenting (request for buying) for gold," as banks are running out of gold stocks.
The central bank has also tightened procedures for importing gold by extending restriction on consignment basis imports from banks to all nominated agencies such as the State Trading Corp.
Accordingly, any import of gold on consignment basis by both nominated agencies and banks shall now be permitted only to meet the needs of exporters of gold jewellery.
On May 13 the RBI had announced its decision to restrict gold imports on consignment basis by banks. This is the third time over the past month that RBI has come out with fresh curbs on gold import for banks. These restrictions are in addition to the proposal made in its annual monetary policy statement on May 4, which said that banks should ensure that the weight of the gold coins does not exceed 50 grams per customer and the amount of loans to any customer against gold ornaments, gold jewellery, and gold coins should be within the approved limit.
* * *
Join GATA here:
Liberty Mastermind Symposium
Double Tree Hotel, Dallas-Fort Worth Airport
Friday-Saturday, June 28-29, 2013
http://www.libertymastermind.us/
* * *
Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:
http://www.goldrush21.com/order.html
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://gata.org/node/wallstreetjournal
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
