News Brief

From Pledging Gold To Bringing It Home: RBI’s 100-Tonne Transfer From UK Vaults To India Marks Country's Economic Shift

Kuldeep Negi

May 31, 2024, 09:53 AM | Updated 11:42 AM IST

Prime Minister Narendra Modi and RBI Governor Shaktikanta Das
Prime Minister Narendra Modi and RBI Governor Shaktikanta Das
  • The Reserve Bank of India has moved over 100 tonnes of gold from the UK to domestic vaults, marking the first transfer on such a scale since 1991.
  • The Reserve Bank of India (RBI) has transferred over 100 tonnes of gold from the United Kingdom to its vaults in India, marking the first significant addition of gold to its local reserves since early 1991.

    This move is primarily for logistical reasons and to diversify storage, Times of India reported citing sources.

    As of the end of March, RBI's gold reserves stood at 822.1 tonnes, with 413.8 tonnes stored overseas.

    In recent years, the RBI has been among the central banks increasing their gold holdings, adding 27.5 tonnes during the last financial year.

    The Bank of England has traditionally been a major storage location for central banks, including India's, with some gold stocks dating back to pre-Independence times.

    “RBI started purchasing gold a few years ago and decided to undertake a review of where it wants to store it, something that is done from time to time. Since stock was building up overseas, it was decided to get some of the gold to India,” an official was quoted as saying by TOI.

    This logistical exercise required months of planning and coordination among the finance ministry, RBI, and other wings of government, including local authorities.

    The transfer involved acquiring a customs duty exemption for shipping the gold into the country, although integrated GST was still applied.

    A special aircraft with detailed security arrangements was used to transport the gold.

    This move is also expected to help RBI save on storage costs paid to the Bank of England, although these savings are not substantial.

    In India, the gold is stored in RBI's vaults in Mumbai and Nagpur.

    The transfer of 100 tonnes of gold, almost a fourth of the country's total stock at the end of March, is seen as a demonstration of the economy's strength and confidence, contrasting sharply with the situation during the 1991 balance of payments crisis when India under the then Chandra Shekhar government pledged gold to tackle the balance of payments crisis.

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    Kuldeep is Senior Editor (Newsroom) at Swarajya. He tweets at @kaydnegi.

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