To, All Scheduled Commercial Banks which are Authorised Dealers in Foreign Exchange
Import of Gold by Nominated Banks/Agencies
Attention of Authorised Persons is invited to paragraph 97 of the Monetary Policy Statement 2013-14 dated May 3, 2013 regarding import of gold. In terms of AD (G.P.Series) circular No.7 dated March 6, 1998 (copy enclosed for ready reference), nominated banks/agencies were permitted to import gold on loan basis, Suppliers Credit/Buyers Credit basis, consignment basis as also on unfixed price basis.
2. The Working Group on Gold (Chairman: ShriK.U.B. Rao) had recommended aligning gold import regulations with rest of the imports for creating a level playing field between gold imports and other imports. Bulk of the gold imported by nominated banks is on consignment basis whereby nominated banks do not have to fund these stocks. To moderate the demand for gold for domestic use, it has been decided to restrict the import of gold on consignment basis by banks,only to meet the genuine needs of exporters of gold jewellery.
3. The above instructions will come into force with immediate effect. ADs may bring the contents of this circular to the notice of their constituents and customers concerned.
4. All other instructions relating to import of gold issued from time to time shall remain unchanged.
5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999).