The Reserve Bank of India has added new restrictions on gold imports in an attempt to curb demand for the precious metal and reduce the country’s current account deficit.
Indian banks will now be required to set aside 20% of all imported gold for export purposes, The Times of India reports. The metal is to be held in bonded warehouses and banks may only import additional gold after they have exported at least 75% of those reserves.
The country’s current account deficit is nearly 5% and gold is a major driver behind that figure, second only to oil.
These restrictions add to a series of measures the Indian government has taken to reduce demand for the yellow metal, including import tariffs and bans on credit card purchases of gold on an installment basis.
India is the world’s largest gold importer, bringing in about 963 tonnes of the precious metal each year, according to China.org.
Creative Commons image by: Rinaldo Wurglitsch