RBI extended 80:20 scheme to import gold to five private banks
The Reserve Bank of India (RBI) on 19 March 2014 extended the 80:20 scheme to import gold to five private banks.
The Reserve Bank of India (RBI) on 19 March 2014 extended the 80:20 scheme to import gold to five private banks. The move was aimed to ease the restrictions on inward shipments of the gold.
The five banks which have been allowed to import gold under the 80:20 scheme are HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank.
Under the 80:20 schemes, nominated agencies could import gold on condition that 20 percent of the shipment would be exported and the remainder would be kept for domestic use. It was introduced by the Government of India and RBI on 14 August 2013 to put curbs on gold imports.
Earlier, under the 80:20 scheme, only six banks and three state-run trading agencies were allowed to import gold provided that each had facilitated export of gold or jewellery in the past three years.
The recent decision of the RBI though does not require any facilitation of exports of gold in the past three years by these private banks. However, it has permitted the import of gold only within a prescribed limits.
The move to allow more banks to import gold will raise shipments to about 40 tonnes per month. India used to ship in as much 70 tonnes per month. Gold import is the biggest import after oil that had pushed the current account deficit (CAD) to a record high in the year ended March 2013.