Banks resume gold import with 100 kg

The gold import has finally resumed after four-month long halt as the two commercial banks imported 100 kg of gold to supply in the domestic market. "NIC Bank and Nabil Bank have imported 50 kg each to supply in the Bagmati zone," said an official associated with gold trade. "Laxmi Bank is also in the line to bring the gold," he informed. The imported amount of gold will be able to provide for the bullion traders of Bagmati zone for 11 days as per the designated quota. "The daily demand for gold in Bagmati zone exceeds 20 kg a day in the off season. Therefore, this amount of gold will not be enough," he said, adding that it will only increase the illegal trafficking of the gold from India.

The ban imposed on gold import was formally lifted after three and half months ¿last month after the central bank issued guidelines to the commercial banks and the traders regarding conditions for gold import. The central bank has fixed 15 kg per day as the quota for gold import solely through authorised commercial banks. However, the gold traders are lobbying for the free import under the provisions of Open General License (OGL) so that there will not be any quota restriction regarding the import. Likewise, the traders are still voicing their discontent with the provisions regarding the distribution among the different gold and silver trading associations.

"The new provisions will create some more disputes among the traders as the quota is so small no dealer will be satisfied with the amount they will get," he said. The bullion traders have been asserting that the distribution will only cause another dispute in the market like one in August 2010 which kept the jewellery market shut for a week. To control escalating Balance of Payments (BoP) deficit caused by excessive gold import, the government had increased the customs duty in March to match with that of India's through an ordinance which expired in September, stopping the supply of fresh gold and silver in the domestic market. The budget of this year then determined the new customs rate for gold at Rs 1,000 for 10 gm and Rs 2,400 for a kg of silver.

Source:
tht