SEAnews 2014-12-12 ArtNo.45388

【Mumbai】The Reserve Bank of India announced withdrawal on the 28th of November with immediate effect of the gold import restrictions popularly known as the “80:20” scheme.
　Introduced in August last year to control the country's widening current account deficit (CAD), the rule enjoined all gold importers to supply at least 20 per cent of the quantity brought in to jewellery exporters.

　Import through official channels had indeed declined since the 80:20 rule but its supply through smuggling had risen several-fold. The World Gold Council had, early this month, forecast gold smuggling to meet 25 per cent of India's supply in 2014, of an estimated overall demand of 850-950 tonnes.
　Gold imports jumped 280 per cent to $4.17 billion in October, as per the latest trade data. The in-bound shipments touched 95 tonnes in September this year as against 12 tonnes a year ago.
　The surprise move comes a time when the industry was actually expecting more curbs imports of gold which is seen as an unproductive asset attracting household savings away from the financial markets.
　"This scheme was totally impractical as it was promoting monopolistic business practices. After scrapping of this scheme, gold prices may come down as there is dip in overall demand in global markets, crude prices are already down and now importers will also charge less premium on import of gold," All India Gems and Jewellery Federation Chairman Haresh Soni said.

○Bank stocks cash in on oil's wild slide

【Mumbai】Banking stocks received another booster from OPEC's decision on oil production and the sharp decline in crude oil prices thereafter on the 27th of November, increasing hopes of a possible rate cut by the Reserve Bank of India (RBI) at its bimonthly credit policy on December 2.
　India's largest lender by assets, State Bank of India (SBI) surged 5.4%, while other public-sector lenders such as Canara Bank, Punjab National Bank (PNB), and Bank of Baroda (BoB) rose 7.5-8%, lifting the bank index to a new record.

【News source】

Reserve Bank scraps 80:20 norm for gold imports

RBI scraps 80:20 gold import curbs; prices may dip

RBI eases gold imports, scraps 80:20 scheme

Bank stocks cash in on oil’s wild slide

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