Kathmandu, January 17

Due to the increasing demand for raw gold in the domestic market amid the ongoing season of wedding and other rituals, Nepal Rastra Bank (NRB) has proposed the Ministry of Commerce (MoC) to hike import quota of gold for banks.

A source at NRB seeking anonymity said that the central bank has recently written to MoC to hike the import quota of raw gold for banks to 25 kilogram per day. Currently, different commercial banks (on a rotation basis) have been importing 20 kilogram of raw gold every day from Dubai, Singapore and Hong Kong, among other nations, to cater to the domestic demand.

NRB has authorised only commercial banks to import gold in Nepal.

“Jewellers have been requesting NRB to hike import quota for raw gold since long and the seasonal demand of the yellow metal has increased in the recent days. We will direct commercial banks to increase import quota of gold immediately after MoC gives a nod to our proposal,” said the NRB source.

However, the NRB official said the central bank is not in a position to raise import quota of gold by more than five kilogram per day because of tight balance of payments situation in country at present.

Meanwhile, Ravi Shankar Saiju, spokesperson for MoC, said that a soon-to-be-held meeting at the ministry will take a decision on allowing banks to increase import quota for gold. “Currently, we are scrutinising the supply-demand situation of gold in the market. MoS will soon allow seasonal increment in import quota of gold for banks,” he informed.

However, Saiju clarified import quota for gold will be brought down within a few months after wedding season is over.

As per Hindu tradition, different rituals are held in the months of January and February and demand for gold jewellery is expected to soar during this time.

Meanwhile, jewellers have said that the government should either increase import quota of gold permanently or also allow jewellers to import raw gold instead of revisiting import quota time and again.

“The demand for gold jewellery has been rising in the market while we have limitations on import of the precious yellow metal. The government should hike import quota of raw gold or allow dealers to import gold themselves as this will help to control smuggling of the yellow metal,” said Mohan Kumar Sunar, president of the Federation of Nepal Gold and Silver Dealers’ Association.

As per him, the demand of raw gold has exceeded 40 kilogram per day at present in the domestic market.