Reserve Bank of India allows more banks to import gold
Duncan Richardson, News Editor
20 Mar 2014, 10:34 a.m.
The Reserve Bank of India (RBI) has confirmed they are going to allow more banks to import gold, this has led many analysts to believe the RBI is about to lift the gold import tax.
According to industry insiders, both Kotak Mahindra Bank and Axis bank have been given authority to import gold under what is known as the 80/20 rule. The rule permits banks from exporting more than 20% with the remaining 80% kept for domestic purposes.
Currently there are only 6 banks and 3 other financial institutions which have permits to import gold. Since the gold import tax was introduced gold imports have plummeted and China overtook India as the world’s largest consumer of gold.
The Indian government is under considerable pressure to reduce the tax, but have confirmed this will only happened once the current account deficit has narrowed.