Reserve Bank of India tightened the Reporting Requirements of the Banks to Monitor Gold Import

The Reserve Bank of India on 3 April 2012 tightened the reporting requirements of the banks. As per the directions issued, banks will have to submit a monthly statement informing the central bank about the quantity of gold imported and mode of payment adopted. The statement is to be filed with the foreign exchange department of the RBI and has to be submitted at the end of March and September.

The directive was issued amidst concerns of huge outflow of foreign exchange on import of gold which is believed to be putting pressure on the India's current account deficit (CAD).

Banks were directed to file a half yearly statement on quantity and value of gold imported by nominated banks, agencies, export-oriented units (EOUs) and special economic zone (SEZs) in gem & jewellery sector, as well as mode of payment. Banks were also directed to file monthly statement on the quantity and value of gold imports by the nominated agencies (other than the nominated banks), EOUs, SEZs as well as the cumulative position at the end of the reporting month.

Earlier, banks were only required to submit a monthly statement on the number of transactions and value of gold imported by EOUs, units in SEZ\export processing zone and nominated agencies/banks.

As per the World Gold Council, the total gold imported in India in 2011 was 969 tonnes. India is the world's largest importer and consumer of the precious metal. India's gold import bill was USD 46 billion in April- November 2011, next only to USD 71-72 billion of crude oil. Hence to discourage gold imports, the government doubled the customs duty on it to four percent.