Banks forced to import gold when available at a 2% discount locally

Allowing banks to do local sourcing of gold that meets the standards will help solve many issues

The more than a dozen banks nominated for importing gold are being forced to buy the metal from abroad for lending it to jewellers at a time when it can be purchased at a discount from the domestic market.

In the Mumbai market, gold is trading at a discount of over 2 per cent compared to the international price or cost of import. However, banks are not allowed to buy gold in India because of restrictions put by the Banking Regulations Act. They can only sell or import gold on behalf of users and traders after permission from the Reserve Bank