MUMBAI Indian banks have been asked by the Reserve Bank of India to restrict financing of purchases of gold in the form of bullion, jewellery and coins or units of exchange traded funds, in the latest of the measure to restrict gold imports to counter ballooning fiscal deficit.
"This won't impact gold trade as only 1 percent of traders used to depend on this form of financing," said Kumar Jain, vice chairman of Mumbai Jewellers Association, which groups 15,000 jewellers.
Industry officials said traders hypothecate the gold stocks with the banks to finance their working capital requirements.
Gold imports into India rose 9 percent to 223 tonnes in the September quarter, after a decline of more than 50 percent in the first half to June as doubling of import duty and record high prices dented sales. (Reporting by Siddesh Mayenkar; Editing by Anand Basu)
Trending On Reuters
India has signed a pact with Boeing Co for purchasing four maritime spy planes at an estimated $1 billion, defence and industry sources said, aiming to bolster the navy as it tries to check China's presence in the Indian Ocean. Full Article