The decision to allow more banks to import gold will help reduce the cost of the yellow metal, and a cheaper gold will narrow the current account deficit (CAD), Reserve Bank of India Deputy Governor K. C. Chakrabarty said here on Thursday.
There were reports in the media that the central bank had allowed some banks to import gold, including, HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank.
“If there is competition, gold will be imported at a lower cost........ which will be cheaper,” said Dr. Chakrabarty on the sidelines of a conference here. According to him, CAD will be reduced to that extent.
On the issue of new banking licences, the Deputy Governor said the central bank was yet to hear from the Election Commission.
“I only know that the RBI has written to the Election Commission” seeking its views on issuing new licences in the light of the forthcoming general elections, said Dr. Chakrabarty adding, whether it had replied or not, “I have no idea.” “Until yesterday, I have no information on that,” he said.
As per the reports in a section of the media, the Election Commission is unlikely to immediately allow the RBI to issue new banking licences.
Quoting a person with direct knowledge of the matter, the report said that the commission needed more clarity on issuing licences.
The sources also indicated that this issue needed more time for the Election Commission to resolve as the Commission was busy with poll arrangements.
The model code of conduct for political parties, which came into force with the declaration of general elections on March 5, will not allow the government to make any announcements which will influence the voters.
