According to a report in the Times of India (TOI), the Reserve Bank of India (RBI) has moved over 100 tonnes of gold from the UK back to India RBI Gold Reserve. This is the first time that a sizable amount of gold has been added to the locally held reserves since early 1991.
As per the TIH sources, in the upcoming months, there may be another shipment of gold of a comparable value headed for the India RBI Gold Reserve..
413.8 tonnes of the 822.1 tonnes of gold owned by the RBI as of the end of March this year were held outside of the country. According to the report, it is one of the central banks in the world that has recently purchased gold, having done so with 27.5 tonnes during the most recent fiscal year.
India is not an exception to the rule, as the Bank of England has functioned as a depository for gold reserves since before independence, with a portion of India’s holdings held in London.
An official was quoted in the report as stating, “The RBI began buying gold a few years ago and decided to make an occasional evaluation of where it wants to store it.
Part of the gold was to be sent to India because stock was increasing abroad.
Many Indians have strong emotional attachments to gold, especially in the wake of the Chandra Shekhar government’s 1991 decision to promise the precious metal in order to overcome the balance of payments problem.
The RBI bought 200 tonnes of gold from the International Monetary Fund (IMF) about fifteen years ago. The Indian central bank has steadily increased its gold holdings through acquisitions in recent years.
“It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991,” the person was quoted in the story.
How it was moved back to India RBI Gold Reserve
In order to import gold, the RBI was granted a customs duty exemption, meaning that the government “forewent revenue” on this sovereign asset. The audit did note that the integrated goods and services tax (GST), which is imposed on imports and distributed to the states, was not exempt.
The large quantity of gold needed to be transported in a specific aeroplane with extensive security procedures. According to the reports, the RBI will also be able to lower some of the storage costs it has been paying to the Bank of England as a result of this decision.
Vaults in Nagpur and the former RBI office building on Mint Road in Mumbai are home to the India RBI Gold Reserve.
