Like many other central banks, the Bank of England has served as a repository, and India is no exception, with a portion of its gold reserves stored in London from pre-Independence days…reports Asian Lite News
The Reserve Bank of India (RBI) has transferred over 100 tonnes of gold from the UK to its domestic vaults, marking the first instance since early 1991 that a significant amount of gold has been added to the locally held reserves.
The report stated that another similar amount of gold could be en route to the country in the coming months.
As of the end of March this year, the RBI had a total of 822.1 tonnes of gold, of which 413.8 tonnes were held overseas. It stands among central banks across the globe that has procured gold in recent years, having acquired 27.5 tonnes during the last financial year, the report stated.
Like many other central banks, the Bank of England has served as a repository, and India is no exception, with a portion of its gold reserves stored in London from pre-Independence days.
The report quoted an official as saying, “The RBI started purchasing gold a few years ago and decided to undertake a review of where it wants to store it, something that is done from time to time. Since stock was building up overseas, it was decided to get some of the gold to India.”
Gold holds significant emotional value for many Indians, particularly following the Chandra Shekhar government’s decision to pledge the precious metal to address the balance of payments crisis in 1991.
Around 15 years ago, the RBI purchased 200 tonnes of gold from the International Monetary Fund (IMF). In recent years, there has been a consistent accumulation of gold reserves through acquisitions by the Indian central bank.
The report quoted a source as saying, “It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991.”
The RBI got a customs duty exemption to ship the importation of gold, with the government ‘foregoing revenue’ on what is a sovereign asset. However, integrated goods and services tax (GST), levied on imports and shared with the states, was not exempted, the report said.
A special aircraft was required to transport the substantial amount of gold, accompanied by comprehensive security measures. This action will also enable the RBI to reduce some of the storage expenses incurred with the Bank of England, the report added.
Gold within the country is stored in vaults located in the RBI’s former office building on Mint Road in Mumbai, as well as in Nagpur.