Banks’ share of gold imports drop to 19% in 2020

Banks’ share of gold imports have shrunk to 19 per cent in 2020 against 40 per cent in 2017 as the share of dore (unrefined gold) imports by refiners increase steadily.

Moreover, with bullion banks such as Nova Scotia exiting their precious metals business, many large bullion dealers who were previously clients of the banks, have set up their own refineries, said the World Council of India report on ‘Bullion Trade in India’.

In the last five years, dore imports made up 30 per cent of total official gold imports due to lower duty. The number of refineries have increased from three in 2012 to 32 in 2020.

Currently, some 25-26 refineries are active, with a combined refining capacity of 1,200 to 1,400 tonnes.

Of these, 23 refineries imported dore in 2020 and the top five refineries accounted for over 70 per cent of India’s dore imports.

With lower duty on dore, the share of gold imports has increased from 11 per cent in 2014 to 29 per cent in 2020.

In last five years ending 2020, imports made up 86 per cent of India’s gold supply, while recycling accounted for 13 per cent and mining accounted for just one per cent.