“In a move that could increase gold supply, nominated banks have been allowed to import gold on ‘consignment basis’ and lend it to local jewellers. For about 15 years till 2014, this was the customary practice of sourcing gold officially. However, this was stopped last year amid concerns that rising gold import could impact the current account deficit. But, following rampant gold smuggling due to the curbs imposed by the government to deter imports and representations by bodies like the Ficci sub-committee on jewellery, the government has now taken a relook at the policy. Banks have been borrowing gold from the international banks at 0.5% and lending it to Indian exporters at 4-6%.”

http://economictimes.indiatimes.com/news/economy/policy/rbi-lifts-ban-on-import-of-gold-coins-medallions-by-banks/articleshow/46290295.cms

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