Ban on import of gold coins and medallions to stay: P Chidambaram

NEW DELHI: Finance Minister P Chidambaram on Tuesday ruled out the possibility of lifting a ban on import of gold coins and medallions after he received suggestions that government should allow import of coins for 'shagun' (auspicious gift) purposes.

"Import of gold coins and gold medallions is prohibited. Nobody can import gold coins and medallions," he said, adding that banks have been told to strictly follow guidelines on gold imports.

He said traders can buy gold from the domestic market and make coins, but the government will not relax the curbs that were imposed to contain the current account deficit (CAD). "I have asked banks to be very strict, at least for gold importing banks, to be very strict on gold imports. They have to scrupulously follow the RBI and government guidelines," he said.

The government is looking to contain gold imports at 850 tonne this fiscal as against 950 tonne in the corresponding period last year. Chidambaram had said this would lower the import bill by $4 billion. The government has raised the import duty on gold to 10% and the factory gate duty on gold bars to 9%.

High gold imports were one of the main reasons that pushed the CAD to a record high of 4.8% of GDP, or $88.2 billion, in the previous financial year.

Gold imports touched a high of 162.4 tonne in May and fell to 7.2 tonne in September. The government expects gold imports to come down to 800 tonne this fiscal.