What changed
Star Trading Houses and Premier Trading Houses, registered as nominated agencies by DGFT, can now import gold under the 20:80 scheme if they had imported gold before the scheme's introduction. Their first import lot is capped at the highest monthly import in the 24 months before August 14, 2013, subject to a maximum of 2,000 kg. Additionally, nominated banks are permitted to give Gold Metal Loans to domestic jewellery manufacturers from their 80% domestic quota, limited to the GML outstanding as on March 31, 2013.
What it means for you
This circular expands the pool of entities eligible to import gold under the 20:80 scheme, potentially increasing gold supply for domestic jewellers. For banks, the ability to extend GML from the domestic quota provides a new lending avenue, but it is restricted to past GML levels, limiting immediate growth. The requirement for upfront payment for domestic sales (except GML) reinforces the RBI's stance against credit-based gold imports, maintaining discipline in the gold trade.
What you must do
- Verify that STH/PTH clients meet the past import and Customs verification conditions before processing gold imports under the 20:80 scheme.
- Ensure that Gold Metal Loans to domestic jewellery manufacturers do not exceed the GML outstanding as on March 31, 2013, and are sourced only from the 80% domestic import quota.
- Advise clients to submit import plans to Customs authorities as required, specifying port-wise and quantity-wise details.
Who it affects
Scheduled Commercial Banks acting as Authorized Dealers, Nominated banks and agencies for gold import, Star Trading Houses and Premier Trading Houses, Domestic jewellery manufacturers and bullion dealers
What is the maximum quantity an STH/PTH can import in the first lot under the 20:80 scheme?
The first lot is based on the highest monthly import in any of the 24 months before August 14, 2013, but capped at 2,000 kg.
Can banks give Gold Metal Loans to any domestic entity?
No, GML can only be given to domestic jewellery manufacturers, and only up to the GML outstanding in the bank's books as on March 31, 2013.
Are there any changes to the 20:80 export obligation for STH/PTH?
No, the same discipline applies: 20% of each imported consignment must be exported before the next consignment is imported.