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RBI Relocates Gold From UK: The Reserve Bank of India (RBI) has recently made a big purchase of gold. Along with this, the exercise of transferring the gold deposited in the warehouses of Britain to India has also been started. The bank has transferred more than 100 tonnes of gold from Britain to its reserve warehouse in the country.
This is the first time since 1991 that the RBI has deposited so much gold in its domestic reserves. According to sources, there are logistical reasons behind depositing gold within the country. Also, the RBI is diversifying its storage. According to the latest data, the RBI had 822.1 tonnes of gold at the end of March. Out of this, 413.8 tonnes of gold is with the RBI abroad. The RBI added 27.5 tonnes of gold to its reserves in the last financial year.
Central banks around the world have traditionally stored gold in the Bank of England's warehouses. India is no exception. The Bank of England has some of India's gold reserves since the pre-independence days. An official said that the RBI had made an effort to bring back the gold a few years ago. It has been stored safely in the country from time to time. Since stocks were piling up abroad, it was decided to bring some gold to India.
In 1991, the Chandrashekhar government had to pledge the precious metal to deal with the balance of payments crisis. Since then, gold has been an emotional issue for most Indians.
The RBI bought 200 tonnes of gold from the International Monetary Fund about 15 years ago. But in the last few years it has steadily increased its gold stock through purchases. “This reflects the strength and confidence of the economy, which is in stark contrast to the situation in 1991.”
But bringing 100 tonnes of gold from abroad was a huge logistical process. This is about a quarter of the gold reserves in the country at the end of March. That is why it required months of planning and precise execution. It required coordination between the Finance Ministry, RBI and some government agencies and local authorities, a source said.
The reason behind gold circulating in the country
First of all, RBI has exempted customs duty on bringing gold into the country. Thus the Centre removed the levy on these sovereign assets. But there was no exemption from the Integrated GST. This tax is levied on imports. This is because this tax is shared with the states. A special aircraft was also needed to carry the huge amount of gold. Extensive security arrangements were made for this. These measures will also help RBI save some money on storage costs. However, this amount is not very high. Inside the country, this gold is kept in the old RBI building on Mint Road in Mumbai and Nagpur.