KATHMANDU: The Commerce Ministry has allowed banks to import smaller unit gold bars, enabling bullion traders to buy only as much as they need and freeing them from having to team up to buy a large unit and split it among themselves. Spokesperson for the ministry Rabi Shankar Sainju said banks could now import gold in units as small as 100 gm.
The move follows repeated pleas by bullion merchants to allow banks to import smaller units as they used to import 1 kg bars which, at the current market price, cost Rs5.05 million each, and they didn’t have the resources to buy so much at a time. The difficulty in selling large units resulted in banks being left with a massive pile of gold bars in their vaults, prompting Nepal Rastra Bank (NRB) to urge the government to change the rule. Last week, the central bank asked the ministry to allow commercial banks to import smaller unit gold bars, citing the inventory that was continuously building up in their strong rooms.
Although the Commerce Ministry has addressed the demand of small gold traders, it may not be able to enforce the decision immediately as NRB is yet to get an official copy of the decision. “Once we receive the letter, we will forward it to the board which will take a formal decision on the issue,” said NRB Executive Director Bhisma Raj Dhungana.
Tej Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Associations, said the latest decision would particularly aid small traders engaged in the business of trading gold and making jewellery. “Currently, small traders have to rely on the small groups that they have formed to purchase gold from banks and split it among themselves,” said Shakya, adding that traders had also registered separate companies just to buy gold from banks.
In 2009, NRB introduced a quota system for bullion imports in a bid to deal with a balance of payments crisis, as money flowed out of the country to pay for gold imports. At present, 12 banks have obtained licences from NRB to import up to 15 kg of gold daily. They pay import duty at the rate of Rs4,200 per 10 gm of gold. The banks are entitled to a commission equivalent to 0.5 percent of the import price. Similarly, traders are allowed a markup of 0.5 percent. As per traders, gold demand has increased recently with the onset of the festivals of Dashain and Tihar. Nationwide demand for gold stands at more than 15 kg daily, said Shakya.
