Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: John Hunt who wrote (25047)	12/29/1998 5:40:00 PM
From: goldsnow	Respond to of 116776

Full story FOCUS-India eyes gold bonds to raise resources 11:22 a.m. Dec 29, 1998 Eastern By Sabyasachi Mitra NEW DELHI, Dec 29 (Reuters) - India is considering the start of gold bond schemes to funnel huge amounts of money locked up in the yellow metal into productive investment, officials said on Tuesday. A Finance Ministry spokesman confirmed a statement made by Finance Minister Yashwant Sinha in a private chat with newspaper editors on Monday that he was looking at the introduction of a gold bond scheme. A senior ministry official, who asked not to be identified, said the government had asked the country's largest commercial bank, the State Bank of India (SBI) and the largest mutual fund, the Unit Trust of India (UTI), to come up with schemes. ''We have asked SBI and UTI to work out some gold bond schemes,'' the official said, adding that the government viewed with concern a recent spurt in gold imports following the introduction of a liberalised trade regime. ''We want the gold to be used for more productive investment than for just store value,'' he said. ''The details are being worked out.'' Officials say a scheme under which gold deposits could be redeemed as gold on maturity would offer security to investors while providing an avenue for the government to raise funds to fuel economic growth. Trade officials said there seemed to be no let-up in India's voracious hunger for gold which has made it the world's biggest importer of the metal. With exports in a slump, gold was seen as a cause for an avoidable trade deficit headache. Commerce Minister Ramakrishna Hegde said on Tuesday that he was considering an idea to link gold imports with a tradeable licence given to exporters. Hegde told the Asian News International (ANI) agency in an interview that gold smuggling had come down because of a liberalisation of imports but added that a rise in the import bill on that account was a matter of concern. ''Therefore I am thinking of it now, but I have not taken a decision yet: Why not link gold imports with SIL? This means that one who exports gets an SIL which can be traded also. So anyone who wants to import gold would have to surrender an SIL. But I haven't decided on it yet,'' he said. ''Imports are estimated to be about 700 tonnes between January and December this year. Last year, imports were of the same level,'' M.L. Damani, president of the Bombay Bullion Association, told Reuters by telephone. Out of the estimated imports of 700 tonnes, some 580 tonnes were estimated to be have been imported through the official channel, he said. ''The rest is through the illegal channel,'' he added. The 700 tonnes brought into the country would have cost around 300 billion rupees ($7 billion), he said. Hegde said petroleum imports usually accounted for the highest amount of expenditure on the trade account. ''But this time gold has become one of the biggest items of imports.'' For decades, India had strict controls on gold imports, a policy widely believed to have only encouraged large-scale smuggling. After the country launched an economic reform programme in 1991, it gradually eased controls on gold imports. Non-resident Indians are now a key source of gold imports, as they are allowed to bring in 10 kg each on payment of an import duty of 220 rupees per 10 grams. India also authorised import of gold by designated agencies in October 1997. They have since become a more popular channel for imports of the metal. ($1-42.5 rupees) Copyright 1998 Reuters Limited