New Delhi: The Finance Ministry on Monday said the government could take more steps to reduce gold imports, which may include banning sale of the yellow metal by banks. "More steps will have to be taken to reduce gold imports. Export import policy on gold will have to be reviewed. May consider banning gold coin sale by banks," Department of Economic Affairs Secretary Arvind Mayaram said.
He was talking to reporters after a meeting of the sub-committee of Financial Stability and Development Council (FSDC), headed by RBI governor D Subbarao. The Committee also discussed, among other things, regulations of chit funds, Mayaram said.
Gold and silver imports during April, 2013 jumped by 138 per cent to $7.5 billion against $3.1 billion in the year-ago period. Due to high gold imports, the country's trade deficit in April widened to USD 17.8 billion year on year.
Higher trade deficit in turn puts pressure on Current Account Deficit (CAD), which has been described as the biggest risk to the Indian economy by the RBI. The CAD, which is difference between the outflow and inflow of foreign currency, touched a record high of 6.7 per cent in the October-December quarter on the back of rising oil and gold imports.
In May, the RBI had imposed curbs on import of the yellow metal by banks. Besides, it has also put restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs.
The government has also taken steps like hike in import duty to restrict gold imports. Gold imports into India, the world's largest consumer of the metal, stood at around 830 tonne in 2012-13.
The FSDC sub-committee discusses issues relating to the financial sector development and stability, including issues relating to inter-regulatory coordination. The sub-committee includes financial sector regulators and DEA Secretary.
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