Finance Minister P. Chidambaram on Tuesday ruled out the possibility of lifting a ban on import of gold coins and medallions and asked banks to strictly follow guidelines restricting inward shipments of the metal.
“Import of gold coins and gold medallions is prohibited. Nobody can import gold coins and medallions,” he said, referring to a suggestion that the government should allow import of coins for ‘shagun’ (auspicious gift) purposes.
He said traders can buy gold from the domestic market and make coins, but the government will not relax the curbs that were imposed to contain the current account deficit (CAD).
Mr. Chidambaram said banks have been asked to strictly adhere to the norms on gold imports.
“I have asked banks to be very strict, at least for gold importing banks, to be very strict on gold imports. They have to scrupulously follow the RBI and government guidelines,” he said.
High gold imports of 845 tonnes was one of the main reasons that pushed the CAD — the difference between the inflow and outflow of foreign exchange — to a record high of 4.8 per cent of GDP, or $88.2 billion, in the previous financial year.
Both the Reserve Bank of India (RBI) and the government have taken a slew of measures to curb gold imports to narrow the CAD to $70 billion or 3.7 per cent of GDP this fiscal.
Gold imports touched a high of 162.4 tonnes in May and fell to 7.2 tonnes in September.
The government expects gold imports to come down to 800 tonnes this fiscal.