RBI further tightens gold import rules to tame demand

The Reserve Bank of India on Monday moved on Monday to tighten gold imports again in an attempt to rein-in a record high current account deficit by taming demand for the yellow metal.

The RBI asked all nominated banks and agencies to export at least one-fifth of every lot of imported gold in all forms, and locally make it available only for jewellers.

The central bank said banks need to retain 20% of the imported gold in customs bonded warehouses, and will only be able to further import gold after exporting at least 75% of the gold from those warehouses.

Last month, the RBI had ruled out any transactions for imports unless they were intended to make jewellery for export, as it looks to rein in a record current account deficit.

India's current account deficit hit a record high 4.8% of gross domestic product in the fiscal year that ended in March, fuelled by rising imports of oil and gold.