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The Reserve Bank of India (RBI) on Thursday clarified that gold import against suppliers’ or buyers’ credit will be on 100 per cent cash margin basis and on documents against payment (DP) basis.
RBI asked banks to ensure that no credit is enabled for import of any form of gold. However, gold import on a loan basis may be allowed, RBI said in the notification. Nominated banks or agencies can import gold for lending on to jewellery exporters, it added.
The central bank advised banks to strictly ensure foreign exchange transactions by their constituents with these instructions. It said the instructions will come into force with immediate effect.
Earlier, RBI had decided to restrict gold import on a consignment basis by banks, nominated agencies, and star trading houses in a bid to ensure gold is imported only to meet the genuine needs of the exporters of gold jewellery.
The central bank had also advised banks that “all Letters of Credit (LC) be opened by nominated banks / agencies for import of gold under all categories will be only on 100 per cent cash margin basis and imports of gold will necessarily have to be on documents against payment (DP) basis.”
Accordingly, gold imports on documents against acceptance (DA) basis will not be permitted, the notification said.
