Reserve Bank of India (Reserve Bank of India, RBI) has issued five private Indian banks permission to import gold, reports Reuters. This step can significantly facilitate the import of gold, which has been limited by the Government of India since last year in order to reduce the deficit of the country's trade balance. RBI allowed to import gold to the following banks: HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and YES Bank. The RBI decision will help to increase the supply of gold and cut mark-ups on it, which is of great importance for India, which is the second largest consumer of yellow metal after China.
In July this year, the Government of India enacted the "80/20 rule", which obliges gold importers to ensure the export of one-fifth of the purchased gold. Due to the effect of this rule, only six banks (state or nationalized) and three state trading bodies servicing transactions for the export of gold and jewelry received permits for gold imports.
Now RBI has allowed the export of gold (within the limits set) to five private banks, which for the past three years have not been involved in the export of precious metals and jewelry. However, the limit of gold supply is set depending on the number of customers exporting gold. "They decided to tie the limits in quantitative terms to the number of export customers available," said Executive Vice President of Kotak Mahindra Bank Shekhar Bhandari.