Traders and the jewellery industry have welcomed with caution the move by the Reserve Bank of India (RBI) to allow five domestic private sector banks to import gold.

While it could bolster supplies and reduce the prevailing high premia, market sources felt that the measure was unlikely to significantly impact the industry that had been without adequate supply of the yellow metal. “It is a sham without a practical basis,” Nilesh Gupta, Chairman, Administrative Committee, India Bullion & Jewellers Association, said, adding “it is as needless as the 80:20 scheme”.

Harish Soni, Chairman, All India Gem and Jewellery Traders Federation, said the move “could ease the precarious supply situation and result in a fall in domestic premium. If that happens, it will certainly benefit the consumer”.

The premium had zoomed to around $160 an ounce in the December-January period and reacted to $35-40 levels now. The industry had no problem paying higher duty but consignments should be cleared, he said.