RBI has uplifted the ban imposed on the import of the gold coins and medals by the banks and the trading houses. As a result, the stock market saw a significant growth in the market shares of several jewellery firms in the country.
Renaissance Jewellery went up by 3.15 percent, Shree Ganesh Jewellery House by 2.92 percent, Gitanjali Gems by 3.14 percent, and PC Jeweller by 2.67. On an average, all these companies performed very well with the RBI’s announcement.
“While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed, banks are free to grant gold metal loans,” it had said. However, other institutions including Star and Premier Trading Houses are free to import gold as per their rights, and without any end-use restrictions.
The uplifting came right before this year’s budget announcement, and it is without that the country is among the top importer of gold in the entire world. Analysts believe that the uplifting will increase it even more.
“We view the clarification by the RBI on the 80-20 rule relaxation as positive for the bullion market as it is a step in the right direction towards the possibility of a relaxation in gold import duty,” HSBC analyst James Steel said in a note.
“Indian gold demand would undoubtedly benefit if the government decided to cut gold import tariffs in response to the big drop in its current account deficit,” he said.
Precious metals, especially the yellow metal, is an integral part of the Indian culture. Gold reserve of the RBI can be compared with that being kept in the every house of the country.