|
RAPAPORT... The Reserve Bank of India (RBI) issued the following clarification statement to all scheduled commercial banks which are authorized dealers (ADs) in foreign exchange and all agencies nominated for importing gold. Import of Gold by Nominated Banks /Agencies Drawing upon our A.P. (DIR Series) Circular No. 103 dated May 13, 2013 and A.P. (DIR Series) Circular No. 107 dated June 4, 2013, the import of gold on a consignment basis was restricted by banks, nominated agencies, premier and star trading houses, which have been permitted by the government of India, to import gold only to meet the genuine needs of the exporters of gold jewelry.
Furthermore, it was advised that all Letters of Credit (LC) be opened by nominated banks and agencies for the import of gold under all categories on only a 100 percent 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. Secondly, it is clarified that, consequently upon issuing the above instructions, import of gold against suppliers/buyers credit, as well as the import of gold and on unfixed price basis, has to necessarily observe the discipline stipulated relating to cash margins and DP basis. In other words, AD Category I Banks are required to ensure that credit in any form or name is not enabled for import of any form of gold. Import of gold on loan basis may, however, continue to be allowed since the scheme envisages that the nominated banks/nominated agencies can import gold on loan basis for on-lending only to the exporters of jewelry in sync with the non-applicability of the above restrictions to exporters of gold jewelry. 3. AD Category I Banks are advised to strictly ensure that foreign-exchange transactions effected by / for their constituents are compliant with these instructions. 4. All other instructions relating to import of gold issued from time to time shall remain unchanged. 5. 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. 6. 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) and are without prejudice to permissions / approvals, if any, required under any other law.
|