RBI issued Guidelines on Import of Gold by Nominated Banks and Agencies
RBI permitted the nominated banks to import gold on consignment basis, whereas, all sale of gold domestically will be against upfront payments.
Reserve Bank of India (RBI) on 18 February 2015 issued operational aspects of the guidelines on import of gold under 20: 80 Scheme by nominated banks and agencies.
The RBI issued the guidelines in consultation with the Union Government. It issued the guidelines after it received the requests for clarification on some of the operational aspects of the guidelines on import of gold consequent upon the withdrawal of 20:80 scheme on 28 November 2014.
RBI issued the guidelines under Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999).
The guidelines include:
• The obligation to export under the 20:80 scheme will continue to apply in respect of unutilised gold imported before 28 November 2014 when the scheme was withdrawn.
• The nominated banks are now permitted to import gold on consignment basis, whereas, all sale of gold domestically will be against upfront payments.
• Banks can grant gold metal loans.
• Star and Premier Trading Houses (STH/PTH) can import gold on DP basis as per entitlement without any end use restrictions.
• The import on the gold coins and medallions will no longer be prohibited but the restrictions on banks in selling gold coins and medallions were not lifted up.
About 20:80 scheme
It was introduced by RBI in 2013, to bring down inbound shipments, to stop the sliding rupee and to combat a huge current account deficit (CAD).
Under the scheme, 20 percent of the imported gold had to be mandatorily exported as finished products like jewellery.