Reserve Bank Of India
A.P. (DIR Series) Circular No. 15
July 22, 2013
To
All Scheduled Commercial Banks which are Authorised Dealers (ADs) in
Foreign Exchange/ All Agencies nominated for import of gold
Madam / Sir,
Import of Gold by Nominated Banks /Agencies/Entities
Attention of Authorised Persons is drawn to the Reserve Bank’s
A.P. (DIR Series)
Circulars No. 103,
107 and
122 dated May 13, June 04 and June 27, 2013
respectively on the captioned subject. ;As per these instructions, certain
restrictions were imposed on the import of various forms of gold by nominated
banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs which
have been permitted to import gold for use in the domestic sector. None of these
restrictions was applicable to import of gold for the purpose of exports or to
import of gold by units in SEZ exclusively for the purposes of exports.
- Based on a review of the above instructions and in consultation with
Government of India, it has been decided to rationalize the import of gold in
any form/purity including import of gold coins/dore into the country.
Accordingly, the following instructions are issued:
- It shall be incumbent on all nominated banks/nominated agencies to ensure
that at least one fifth of every lot of import of gold (in any form/purity
including import of gold coins/dore) is exclusively made available for the
purpose of export. Such imports shall be linked to financing of exporters by the
nominated agencies (i.e. average of last three years or any one year whichever
is higher). Further, they shall make available gold in any form for domestic use
only to entities engaged in jewellery business/bullion dealers supplying gold to
jewellers.
- They will be required to retain 20 per cent of the imported quantity in the
customs bonded warehouses.
- They are permitted to undertake fresh imports of gold only after the exports
have taken place to the extent of at least 75 per cent of gold remaining in the
customs bonded warehouse.
- Any import of gold under any type of scheme, shall follow the 20/80 principle
set out at (a) and (b) above. The extant instructions, as regards import of gold
on consignment basis, LC restrictions etc. stand withdrawn.
- A working example of the operation the scheme envisaged in terms the present
instructions is given in the Annex.
- Entities/units in the SEZ and EoUs, Premier and Star trading houses are
permitted to import gold exclusively for the purpose of exports only.
- AD Category I Banks are advised to strictly ensure that foreign exchange
transactions effected by / for their constituents are compliant with the above
instructions. Head Offices of nominated agencies / International Banking
Divisions of banks would be responsible for monitoring operations of the revised
scheme taking into account transactions put through different centres.
- Government of India will be issuing separate instructions, if any, to the
customs authorities/DGFT to operationalize and monitor these import
restrictions.
- The above instructions will come into force with immediate effect. Authorised
dealers may please bring the contents of this circular to the notice of their
constituents and customers concerned.
- 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.
Yours faithfully
Rudra Narayan Kar
Chief General Manager-in-Charge
RBI/2013-14/148
Annex
An example of the working of the scheme:
- Nominated agency ABC imports say 100 kg of gold in any form/purity.
- Out of the above import of 100 kg, 20 kg gold held in the bonded warehouse can
be got released in part or full to be sold to exporters of gold against
undertaking to customs authorities as is the practice now.
- Any further import of gold by ABC shall be permitted by the customs authorities
only to the extent of actual export out of 20 kg of gold held in bonded
warehouse. This can happen only after at least 15 kg of gold out of 20 kg is
actually exported from the previous lot.
- If ABC wants to place order for the second lot of import, only 75 kg of import
(including 15 kg for exports) will be permitted which will again follow the
procedure outlined above. At this stage, total gold with the bonded warehouse
meant for the exporter will be (5 + 15) i.e. 20 kg. Out of this at least 15 kg
(i.e. 75% of the above 20 kgs) will have to be actually exported to enable ABC
to import again. This procedure will be followed for every lot of import.
- If for any reason, ABC is not able to channelize the gold held in bonded
warehouse for exports, no further imports can be undertaken by ABC who will also
arrange for re export of the gold in the bonded warehouse.