The Finance Ministry today said that the Government could take more steps to reduce gold imports, which may include banning the sale of yellow metal by banks.

“More steps will have to be taken to reduce gold imports. Export import policy on gold will have to be reviewed. May consider banning gold coins sale by banks,” Department of Economic Affairs Secretary Arvind Mayaram told reporters here.

He said this after a meeting of the sub-committee of the Financial Stability and Development Council (FSDC) headed by RBI Governor D. Subbarao.

The committee also discussed, among other things, regulations of chit funds.

Gold and silver imports during April jumped 138 per cent to $7.5 billion from $3.1 billion in the year-ago period. Due to high gold imports, the country’s trade deficit widened to $17.8 billion year-on-year.

Trade deficit, current account deficit

Higher trade deficit in turn has put pressure on the Current Account Deficit (CAD), which has been described as the biggest risk to the Indian economy by the Reserve Bank.

The CAD, which is difference between the outflow and inflow of foreign currency, touched a record high of 6.7 per cent during October-December quarter on the back of rising oil and gold imports.

Last month, the RBI had imposed curbs on gold import by banks. Besides, it has also put restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs.

The Government has also taken steps like raising the import duty to restrict gold imports.

Gold imports into India, the world’s largest consumer of the metal, stood at around 830 tonnes in 2012-13.