According to a newspaper report on Friday, India’s central bank has transferred over 100 metric tons (1 lakh kilograms) of gold from Britain to its domestic vault. This marks the first time since the 1991 economic crisis that such a large quantity of gold has been brought to India from Britain. During the 1991 crisis, India had to mortgage its gold reserves abroad.
Reasons for the Transfer
The transfer of gold from Britain to India is said to have been undertaken for logistical reasons and to diversify storage. Media reports suggest that more precious metals may be brought to the country in the coming months.
Reserve Bank of India’s Gold Reserves
As of the end of March, the Reserve Bank of India (RBI) held 822.10 tonnes of gold, out of which 408.31 tonnes were stored domestically. The remaining gold was kept abroad. In the last financial year, the RBI increased its gold reserves by 27.5 tonnes.
Global Trend of Increasing Gold Reserves
Central banks worldwide have been increasing their gold reserves in recent times. This strategic move is often taken as a hedge against currency volatility and geopolitical risks. The decision to transfer gold to India was reportedly made because the country’s stock of gold held outside was steadily increasing. The RBI has not officially commented on this matter yet.
Significance of the Transfer
The transfer of gold from Britain to India is significant as it is the first time since 1991 that India has moved gold on such a large scale within the country. In 1991, the RBI faced criticism for mortgaging a portion of its gold reserves during a foreign exchange crisis.
Storage Locations
Domestically, gold is stored in the vaults located at RBI’s Mumbai Mint Road and Nagpur’s old office building. The recent transfer of gold from Britain to India is expected to enhance storage diversity and streamline logistical operations.
