Dhanteras special: RBI brings home 102 tonnes of gold; here's why

According to the RBI's latest report on foreign exchange reserves, as of the end of September, the central bank holds 855 tonnes of gold, with 510.5 tonnes now stored domestically

The Reserve Bank of India (RBI) on the auspicious occasion of Dhanteras (29 October) announced that it has transported an additional 102 tonnes of gold from the Bank of England's vaults in London to secure storage facilities within India.

 

As per RBI’s latest report on foreign exchange reserves, as of the end of September, the central bank holds 855 tonnes of gold, with 510.5 tonnes now stored domestically. Since September 2022, a total of 214 tonnes has been relocated to India as the RBI and the government prioritise safeguarding their assets amid escalating global geopolitical tensions.

 

The shift to domestic storage follows a significant move in May, when approximately 100 tonnes were transferred from the Bank of England. Authorities undertook a discreet operation involving specialised aircraft and robust security protocols to handle the transfer. The details of the mission remain confidential. Moving the reserves also required an exemption from specific taxes. Officials indicate that further transfers are possible, although no substantial shipments are anticipated this year.

 

Gold reserves strategy

 

The RBI continues to retain 324 tonnes of its gold reserves under the protection of the Bank of England and the Bank for International Settlements, which collectively hold a substantial portion of India's gold abroad. Around 20 tonnes are additionally managed through gold deposit schemes. The Bank of England, established in 1697, is renowned for its extensive gold storage facilities and remains the world’s second-largest gold custodian after the New York Federal Reserve. 

 

Storing part of India’s gold in London provides the RBI with immediate access to the London bullion market, allowing for enhanced liquidity. RBI data also shows an increase in gold reserves, which represented 9.3 per cent of India’s foreign exchange reserves by the end of September, up from 8.1 per cent at the close of March.