Page 49 - 31MAY2019E

BANKING

in safe custody with Bank of England of India, which added 6.5 tonnes of said, “Following the multi-decade high
and Bank of International Settlements.” gold to its reserves in January, tak- in gold reserve growth in 2018, central
After going through RBI’s audit ing its total holding forming part of banks’ appetite remained healthy at
reports from the year 2011 through its foreign exchange reserves to 607 the start of 2019. Gross purchases of
2015, Chaturvedi claimed that “some- tonnes, was all set to become the tenth 48 tonnes and gross sales of 13 tonnes
thing fishy” happened between 2014 largest holder of the metal worldwide, led to global gold reserves rising by 35
and 2015. displacing the Netherlands. According tonnes on a net basis in January, with
As per RBI’s annual balance sheet to data provided by the World Gold sizeable increases from nine central
dated June 30, 2011, the said quantity Council, India’s share of gold held glob- banks. This is the largest January in-
of gold was in India as of then. The ally has been rising steadily to stand at crease in gold reserves in our records
annual balance sheet released on June 6.2 per cent at the end of 2018 and had (going back to 2002) and illustrates the
30, 2014, also showed that the gold gone up further in January 2019. recent strength in gold accumulation.”
remained in India. In fact, most central banks were In 2018, over 600 tonnes of gold
However, the process to transport seen raising their gold holdings as the were bought by central banks, led by
the gold overseas, away from the pub- dollar was strengthening, as they felt those in emerging markets. This was
lic limelight, began immediately after the need to diversify their reserves. highest in the past five decades. As part
the Modi government came to power Gold is seen as a better hedge against of its efforts to diversify the reserves,
in May 2014. As per the annual audit the dollar than any other currency. Ac- the Reserve Bank of India (RBI) bought
report of 2015, a part of the said gold cording to WGC, global gold reserves in 13.7 tonnes of gold in the September
was kept at the Bank of International January rose by as much as 35 tonnes quarter. India, along with a few other
Settlements, Switzerland, while the on a net basis (gross purchases of 48 central banks, lifted their quarterly and
rest remained in India. tonnes less gross sales of 13 tonnes), year-to-date gold purchases to a three-
“This transfer of India’s gold assets with sizeable purchases by nine cen- year high.
to a foreign country should have been tral banks. The data also placed India in The RBI added 13.7 tonnes of gold
in public domain. The government is the 11th spot among top holders of gold to its reserves after buying 8.46 tonnes
clearly hiding something, hoping that as a part of forex reserves, in a loss that by the end of FY18. This brought year-
they would be able to avoid public includes the International Monetary to-date purchases to 21.8 tonnes. RBI
scrutiny,” says Chaturvedi. fund as well. held 566.23 tonnes of gold as on June
It is learnt that the Reserve Bank Sources in the World Gold Council 30, 2018.
Before 2018, the RBI
had purchased gold in
November 2009. Then the
central bank had bought
200 tonnes of yellow metal
from the International
Monetary Fund (IMF) and
had triggered a bull-run in
the commodity.
The Netherlands holds
the 10th position with 612.5
tonnes, or just about 5.5
tonnes ahead of the RBI.
Netherlands’ central bank
has not changed in the last
decade and, as a matter
of fact, it had been selling
gold ten years ago under an
agreement with European
central banks to reduce
gold holdings. The moving
away of over 200 tonnes of
gold from India could raise
doubts over the data.
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