The Reserve Bank of India (RBI) moved approximately 100 metric tonnes of gold from the United Kingdom to its vaults in India in FY24.
As per reports, this move is the largest repatriation of gold reserves by the country since 1991, highlighting the RBI's strategic effort to diversify and secure its gold holdings domestically.
An official quoted in the reports stated, "RBI started purchasing gold a few years ago and decided to undertake a review of where it wants to store it, something that is done from time to time. Since stock was building up overseas, it was decided to get some of the gold to India,”
Bank of England : A major Repository
The Bank of England has been a major repository for central banks around the world, including India. As of March 2024, the RBI held 822.1 tonnes of gold, with 413.8 tonnes stored overseas.
The recent repatriation brings the domestic gold reserves to over 408 tonnes, almost evenly balancing the storage between domestic and foreign locations.
Situation different from 1991
This move if compared to 1991, when India had to pledge a substantial part of its gold reserves to address a severe balance of payments crisis.
"It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991," a media source commented.
Logistical Complexity
A comprehensive planning and close coordination among the finance ministry, RBI, and various government departments was the ultimate need, keeping logistical complexity of transferring such a significant quantity of gold in mind.
Special aircraft and high-security measures were employed to ensure the safe transit of the gold, with operations conducted in secrecy due to the high value of the cargo.
The gold is stored in vaults located in the RBI's old office building on Mumbai's Mint Road and in Nagpur.
RBI adding onto its Gold Reserves
The RBI has been increasing its gold reserves over recent years as part of a broader strategy to diversify its foreign exchange assets, hedge against inflation, and mitigate foreign currency risks.
In the last financial year alone, the RBI added 27.46 tonnes to its holdings, continuing a trend that began with a major purchase from the International Monetary Fund in 2009. The country's overall gold holding stands at 822 metric tonnes, as per official data.
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