India moves 100 metric tonnes of gold from UK to domestic vaults

Mumbai: India has moved 100 metric tonnes of its gold stored in the UK to domestic vaults in FY24, sources said on Friday.

This is one of the biggest movements of gold undertaken by the country since 1991, when pledging a substantial part of the gold holding to tide over a foreign exchange crisis resulted in its movement out of vaults.

The country’s overall gold holding increased 27.46 metric tonnes in FY24 and it stands at 822 metric tonnes, as per official data.

A substantial part of the precious commodity is stored abroad, the sources said, adding that India also had its holding with the Bank of England like other countries.

The movement of 100 metric tonnes into India has taken the overall quantity stored locally to over 408 metric tonnes of gold, which means the local and foreign holding is now split almost evenly.

As per the annual report of the central bank for FY24 released on Thursday, over 308 metric tonnes of gold is held in India as backing for notes issued, while another 100.28 tonnes is held locally as an asset of the banking department.

Of the overall gold reserves, 413.79 metric tonnes are held abroad, the annual report said.

According to the sources, given the gold buying over the last few years, a call was taken to reduce the holding abroad which is part of the standard review procedures.

In 2009, India had bought 200 tonnes of gold from the International Monetary Fund, after which it has been buying the precious commodity from the secondary market as part of its foreign exchange asset diversification efforts.

Officials from the Ministry of Finance, the RBI and other agencies took care of the movement of gold in complete secrecy given the high value, as per the sources.

At present, the gold held locally is stored at high security vaults and facilities in Mumbai and Nagpur, the sources added.