RBI extended 80:20 scheme to import gold to five private banks

The Reserve Bank of India (RBI) extended the 80:20 schemes to import gold to five private banks.
Under RBI 80:20 scheme

• Banks have been allowed to import gold:HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank.
• Objective: To make easy on inward consignment of the gold.
• Nominated agencies could import gold with a condition that 80% kept for domestic use and 20% of the consignment will be exported.

• Does not require any simplification of exports of gold in the past three years by these private banks.
• These five private banks can import gold within prescribed limits.
• Allowed more banks to import gold and it will raise consignments up to 40 tonnes per month 70 tonnes per month India used to send.

Previously, only 6 banks and 3 state-run trading agencies were allowed to import gold provided that each had simplified export of gold in past 3 years. .
Note: After oil import, Gold import is the 2nd biggest import that had pushed the current account deficit (CAD) to a record high in the last year.

Month: Current Affairs - March, 2014