NRB allows registered individual traders to buy one kilogram gold a day
KATHMANDU, April 20:
In a newly-released directive for the import of gold and silver, the central bank has increased the quota for the registered gold traders and also tried to break the cartel of bullion traders.
For the first time, Nepal Gold and Silver Dealers’ Association (Negosida) has been kept out of the gold distribution mechanism.
Issuing a set of new directives called ‘Gold Import and Distribution Regulation 2068’, today, Nepal Rastra Bank (NRB) has said that a trader can directly buy up to one kg of gold every day against the earlier quota of half a kg gold.
“Now registered traders can directly purchase one kg gold from banks recommended by Nepal Banker’s Association,” said Bhaskar Mani Gyawali, spokesperson at Nepal Rastra Bank (NRB).
Earlier, the traders needed recommendation from Nepal Gold and Silver Dealers’ Association (Negosida) to purchase gold, whereas now traders can directly purchase a kg of gold per day from banks.
“However, gold import will only be allowed for Class ‘A’ banks under the recommendation of Nepal Bankers’ Association, according to the central bank’s new regulation. “But the import quantity will be fixed by the central bank.”
Earlier, Nepal Rastra Bank had set a daily import quota of 15 kg of gold. This has now been doubled, according to the new regulation.
“Members of Federation of Handicrafts Association of Nepal, who have certificate of export, also can purchase gold directly from banks,” Gyawali added.
The new regulation stated that Nepal Bankers’ Association has to distribute 60 per cent gold within Bagmati zone, while remaining 40 per cent should be distributed to other zones, making it a compulsory provision to distribute to Dhangadi, Nepalgunj, Siddharthnagar, Pokhara, Birgunj, Biratnagar, Janakpur and Bhadrapur districts, other business centres and cities.
The central bank has also set Mark Up Limitation for the bankers for the gold transaction with traders. According to which banks can only fix maximum mark up of one per cent.
Gold now can be imported by issuing Letter of Credit (L/C) or Stand by Letter of Credit or Draft/TT. Through the process, gold importers can import economic size of gold that is not exceeding by the allocated quota per day.
In January, the government had opened the import of gold after a long hiatus of three months – though giving the authority to import the precious yellow metal through commercial banks only. But the new provision gave rise to the gold smuggling fuelling the Indian currency (IC) demand destabilising the IC reserve with the central bank.
Gold traders have been opposing the earlier regulation saying that the quota id not enough for market demand and the procedure is lengthy and impractical.
The pesky procedures for buying gold from commercial banks pushed the gold traders to buy illegal gold getting imported from India. The traders had opposed the system and had demanded the open import of gold through Open General License (OGL) from the very start.
“Though, the central bank has increased quota according to market demand, the procedure is still impractical,” said an office bearer of Nepal Gold and Silver Dealers Association (Negosida).
Gold import has decreased by 94.4 per cent in the first seven months of the current fiscal year compared to the same period of last fiscal year, according to the central bank.
During the fiscal year 2009 – 10 gold worth Rs 35.46 billion was imported pushing Balance of Payments (BoP) to deficit. The government had increased customs duty last March to match with that of India’s through an ordinance before banning gold and silver import last September.
However, the budget for the current fiscal year has fixed custom rate of gold at Rs 1,000 per 10 gm and Rs 2,400 for a kg of silver.
Source: THT
In a newly-released directive for the import of gold and silver, the central bank has increased the quota for the registered gold traders and also tried to break the cartel of bullion traders.
For the first time, Nepal Gold and Silver Dealers’ Association (Negosida) has been kept out of the gold distribution mechanism.
Issuing a set of new directives called ‘Gold Import and Distribution Regulation 2068’, today, Nepal Rastra Bank (NRB) has said that a trader can directly buy up to one kg of gold every day against the earlier quota of half a kg gold.
“Now registered traders can directly purchase one kg gold from banks recommended by Nepal Banker’s Association,” said Bhaskar Mani Gyawali, spokesperson at Nepal Rastra Bank (NRB).
Earlier, the traders needed recommendation from Nepal Gold and Silver Dealers’ Association (Negosida) to purchase gold, whereas now traders can directly purchase a kg of gold per day from banks.
“However, gold import will only be allowed for Class ‘A’ banks under the recommendation of Nepal Bankers’ Association, according to the central bank’s new regulation. “But the import quantity will be fixed by the central bank.”
Earlier, Nepal Rastra Bank had set a daily import quota of 15 kg of gold. This has now been doubled, according to the new regulation.
“Members of Federation of Handicrafts Association of Nepal, who have certificate of export, also can purchase gold directly from banks,” Gyawali added.
The new regulation stated that Nepal Bankers’ Association has to distribute 60 per cent gold within Bagmati zone, while remaining 40 per cent should be distributed to other zones, making it a compulsory provision to distribute to Dhangadi, Nepalgunj, Siddharthnagar, Pokhara, Birgunj, Biratnagar, Janakpur and Bhadrapur districts, other business centres and cities.
The central bank has also set Mark Up Limitation for the bankers for the gold transaction with traders. According to which banks can only fix maximum mark up of one per cent.
Gold now can be imported by issuing Letter of Credit (L/C) or Stand by Letter of Credit or Draft/TT. Through the process, gold importers can import economic size of gold that is not exceeding by the allocated quota per day.
In January, the government had opened the import of gold after a long hiatus of three months – though giving the authority to import the precious yellow metal through commercial banks only. But the new provision gave rise to the gold smuggling fuelling the Indian currency (IC) demand destabilising the IC reserve with the central bank.
Gold traders have been opposing the earlier regulation saying that the quota id not enough for market demand and the procedure is lengthy and impractical.
The pesky procedures for buying gold from commercial banks pushed the gold traders to buy illegal gold getting imported from India. The traders had opposed the system and had demanded the open import of gold through Open General License (OGL) from the very start.
“Though, the central bank has increased quota according to market demand, the procedure is still impractical,” said an office bearer of Nepal Gold and Silver Dealers Association (Negosida).
Gold import has decreased by 94.4 per cent in the first seven months of the current fiscal year compared to the same period of last fiscal year, according to the central bank.
During the fiscal year 2009 – 10 gold worth Rs 35.46 billion was imported pushing Balance of Payments (BoP) to deficit. The government had increased customs duty last March to match with that of India’s through an ordinance before banning gold and silver import last September.
However, the budget for the current fiscal year has fixed custom rate of gold at Rs 1,000 per 10 gm and Rs 2,400 for a kg of silver.
Source: THT
