Promotion Council for EOUs & SEZ Units
(Ministry of Commerce and Industry,
Govt. of India)
Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : email@example.com
CIRCULAR NO.54 DATED 12-7-04
: Direct Import of Gold by EOUs and Units in SEZs
Bank of India (RBI) has issued A.P. (DIR Series) Circular
No. 2 dated 9th July 2004. In this Circular RBI
has clarified that nominated agencies, approved banks and
EOUs/SEZ Units in Gems & Jewellery Sector can
import gold directly. RBI has also stipulated certain
conditions in Para 4 of this Circular. A copy of this Circular
is enclosed alogwith.
is for your kind information please.
of Gold by (i) Export Oriented Units (EOUs), (ii) Units
in SEZ/EPZ, and (iii) Nominated Agencies - A.P.(DIR Series)
Circular No. 2
A.P.(DIR Series) Circular No.2
July 9, 2004
Scheduled Commercial Banks which are Authorised Dealers
in Foreign Exchange
of Gold by (i) Export Oriented Units (EOUs), (ii) Units
in SEZ/EPZ, and (iii) Nominated Agencies
refer to our A.D. (G.P. Series) Circular No.7 dated March
6, 1998 (copy enclosed) wherein nominated
agencies and approved banks were permitted to import gold
under different arrangements.
Attention of Authorised Dealers (ADs) is also invited to
(DIR Series) Circular No. 25 dated October 1, 2003 in
which ADs were advised that Letter of Credit (LC) for import
of gold under the Nominated Agency Scheme must be established
on behalf of the Nominated Agencies themselves and under
no circumstances should the LC be issued on behalf of any
other entity, even if a letter of authority issued by the
Nominated Agency is furnished by these entities.
The Ministry of Commerce & Industry has since clarified
that as per para 6.2 (b) of the EXIM Policy 2002-2007, Export
Oriented Units (EOUs) in the Gem & Jewellery sector,
are permitted to import gold directly. These units can also
source gold through the existing nominated agencies, in
terms of para 6.2 (g) of the policy. Further, units in Special
Economic Zones (SEZs) in the gems and jewellery sector can
also import gold as per the EXIM Policy 2002-2007. Accordingly,
as per the extant guidelines in force, only nominated agencies,
approved banks and EOUs/SEZ units in gems and jewellery
sector can directly import gold.
ADs can therefore open Letters of Credit and allow remittances
on behalf of EOUs, units in SEZs in the Gem & Jewellery
sector and nominated agencies, for direct import of gold,
subject to the following conditions:
The import of gold should be strictly in accordance
with the EXIM Policy.
Suppliers’ and Buyers’ Credit, including the usance
period of LCs opened for direct import of gold should not
exceed 90 days.
Bankers' prudence should be strictly exercised for
all transactions pertaining to import of gold. ADs should
ensure that due diligence is undertaken and all Know-Your-Customer
(KYC) norms and the Anti-Money-Laundering guidelines, issued
by DBOD, Reserve Bank (cf.DBOD.AML.BC.18/14.01.001/2002-03,
Dated August 16, 2002), are adhered to while undertaking
such transactions. Any large or abnormal increase in the
volume of business of the importer should be closely examined
to ensure that the transactions are bonafide trade transactions.
ADs should closely monitor such transactions in
addition to carrying out the normal due diligence exercise.
The credentials of the supplier should also be ascertained
before opening of LCs. The financial standing, line of business
and the net worth of the importer customer should be commensurate
with the volume of business turnover. Apart from the above,
in case of such transactions banks should also make discreet
enquiries from other banks to assess the actual position.
Further, in order to establish audit trail of import/export
transactions, all documents pertaining to such transactions
must be preserved for at least five years.
ADs should follow up submission of the Bill
of Entry by the importers as instructed in our A.P.(DIR
Series) Circular No.9, dated August 18, 2003.
- Head Offices/IBDs, of ADs undertaking gold import transactions
are required to submit a monthly statement thereof, as
per the format enclosed in the Annex,
to the Trade Division, Foreign Exchange Department, Central
Office, Reserve Bank of India, Shaheed Bhagat Singh Marg,
Fort, Mumbai. The statement should be submitted within
ten days of the following month. The statement should
also be submitted by e-mail at the following e-mail ID
These guidelines are issued from the foreign exchange angle
only under the provisions of FEMA, 1999 and should not be
construed to convey the approval by any other statutory
authority or Government under any other existing laws/regulations.
If further approval or permission is required from any other
regulatory authority or Government under the relevant laws/regulations,
the concerned entity should take the approval of the agency
concerned before effecting the transaction.
ADs may bring the contents of this circular to the notice
of their constituents and customers concerned.
The directions contained in this circular have been issued
under Section 10 (4) and Section 11 (1) of the Foreign Exchange
Management Act (FEMA), 1999 (42 of 1999).
Series) Circular No.2
July 9, 2004]
of Gold Imported during the month ended ……….
of the Bank :
of Statement :
Number of Transactions
Value of Gold Imported
(i) Delivery Against
(ii) Suppliers’ Credit
(iv) Unfixed Price
1. Full details of transactions may be provided in cases
where the number of transactions in respect of a single
importer exceeds ten transactions in a month or the aggregate
value of imports exceeds US Dollar 50 million.
Details of EOUs/Units in SEZ and Nominated Agencies should
be given separately.
to [A.P.(DIR Series)
No.2 dated July 9, 2004]
Series) Circular No.7
March 6, 1998
Authorised Dealers in Foreign Exchange
of Gold by Nominated Banks/Agencies
Under the liberalised policy for import, Government of India
has permitted import of gold by certain nominated agencies
viz. MMTC, HHEC, STC, SBI and other agencies authorised
by Reserve Bank for sale to jewellery manufacturers, exporters,
NRIs, holders of Special Import licences and domestic users
[cf. paragraph 8.15 of Exim Policy 1997-2002]. It has, therefore,
been decided to permit the nominated agencies/banks to import
gold under different arrangements, besides outright purchase
on D/P basis, as follows :
(i) Import of Gold on loan basis
loan may be availed of by nominated agencies/banks, where
the loan is denominated on the basis of the quantity of
gold, subject to the following conditions -
The loan shall be obtained directly from the overseas supplier.
The period of loan shall not be more than 180 days from
the date of shipment. Extension of period beyond 180 days
will require prior approval of Central Office of Reserve
Bank (Imports Division).
Rate of interest on loan shall be as per the prevailing
Metal account in the books of the overseas supplier, if
required by the supplier, may be maintained by the nominated
bank/agency for the purpose of routing the import transactions
only. No deposits will be permitted.
Guarantee for the loan, if required by the supplier may
be furnished by the nominated agency.
Import of gold on Suppliers credit/Buyers credit basis
credit up to a period of 180 days may be availed of by the
nominated agencies/banks subject to the provisions of paragraph
7A.12 of Exchange Control Manual 1993. Prior approval of
Reserve Bank will be required if the period of credit exceeds
180 days. However, buyers credit will require prior approval
of Reserve Bank irrespective of the period of credit.
of Gold on Consignment basis
may be imported by the nominated banks/agencies on consignment
basis wherein the ownership of the goods will rest with
the supplier and the importer [consignee] will be acting
as an agent of the supplier [consignor]. Remittances towards
the cost of import shall be made as and when sales take
place as per the provisions of agreement entered into between
the overseas supplier [consignor] and nominated agency/bank
of gold on unfixed price basis
nominated agency/bank may import gold on outright purchase
basis subject to the condition that although ownership of
the gold shall be passed on to the importer at the time
of import itself, the price of gold shall be fixed later/
as and when the importer sells the gold to the users.
The directions contained in the circular have been issued
under Section 73(3) of the Foreign Exchange Regulation Act,
1973 (46 of 1973) and any contravention or non-observance
thereof is subject to the penalties prescribed under the
Chief General Manager