A similar quantity of gold may be headed into the country again in the coming months with official sources telling TOI that the transfer to locations within the country was for logistical reasons as also for diversified storage.
According to the latest data, at the end of March, RBI had 822.1 tonnes of gold, of which 413.8 tonnes was overseas. It is among central banks that bought gold in recent years, with 27.5 tonnes added during the last financial year.
For a large number of central banks, Bank of England has traditionally been the storehouse and India is no different with some the yellow metal stocks lying in London from pre-Independence days.
“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,” an official said.
For most Indians, gold has been an emotional issue, especially after the Chandra Shekhar govt pledged the precious metal to tackle the balance of payments crisis in 1991. While RBI bought 200 tonnes of gold from the International Monetary Fund around 15 years ago, over the last few years, a steady build up in stocks has taken place through purchases by the Indian central bank.
“It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991,” said a source.
But getting 100 tonnes of gold, which is almost a fourth of the stock in the country at the end of March, was a massive logistical exercise, requiring months of planning and precise execution. It involved close coordination between the finance ministry, RBI and several other wings of govt, including local authorities.
To begin with, RBI got a customs duty exemption to ship the metal into the country with the Centre “foregoing revenue” on what is a sovereign asset. But there was no exemption from integrated GST, which is levied on imports, as the tax is shared with the states.
It also took a special aircraft to fly the large quantities of gold with detailed security arrangements put in place. The move will also help RBI save on some of the storage cost, which is paid to Bank of England, although the amount is not significant.
Within the country, gold is held in vaults in RBI’s old office building on Mumbai’s Mint Road as well as Nagpur.