RBI panel looking into alternative to gold imports

With gold imports contributing substantially to India's current account deficit (CAD), an RBI panel is looking into the aspects of devising some alternative routes, a top official of the central bank said today.

"Gold imports are contributing substantially to India's current account deficit," RBI Deputy Governor Anand Sinha said on the sidelines of an event here.

He said, "Import is one aspect and the other is bringing out the gold which is already existing in the country."

"Whether it can be brought out to satisfy the demand by devising appropriate financial instruments has to be seen. Several proposals are there. There is a committee looking into these aspects," Sinha told reporters.

The country's CAD, which is the difference between total imports & transfers and total exports, widened to the highest ever level to 4.5% of GDP at $21.7 billion in January-March period of FY12.

To a query, he said that the draft guidelines on new banking licences have been circulated.

Sinha said that RBI would proceed further once the Banking Regulation (Amendment) Bill was through. After that, RBI would finalise the guidelines.

Regarding shareholding by foreign banks, he said that it has been already mentioned in the draft guidelines that it would be 49% in the initial years.

After that, it would be usual as per normal FDI rules, Sinha added.