The Reserve Bank of India’s gold reserves stored overseas dropped to 47% of the total by the end of March, the lowest level since December 2017. The RBI began getting gold to India in March 2022, in the wake of the Russia-Ukraine war, a move reflective of global central banks’ caution after the US government froze Russian foreign currency assets.
TOI had reported last month that the RBI brought back 100 tonnes of gold from the UK to India.RBI Governor Shaktikanta Das has attributed this move to sufficient domestic storage capacity and emphasized that no further implications should be drawn. The RBI’s total gold holdings stood at 822.1 tonnes at the end of March.
According to an ET report, an Invesco survey conducted in December 2023, involving 57 central banks and asset managers, revealed that they had increased their gold exposure 8-10 years ago, storing it in London for swaps and yield enhancement.
However, the survey noted a growing trend of central banks moving their gold reserves back to their own countries, highlighting the metal’s role as a safe-haven asset.

RBI’s Gold Rush

The share of gold reserves held by central banks in their own countries has risen from 50% in 2020 to an estimated 68% by December 2023, with expectations of a further increase to 74% over the next five years.
The RBI’s reserves mirror this trend, with the share of domestically held gold increasing from 39% in September 2021 to 53% by March 2024. This marks a significant shift from 1991 when India had to pledge gold overseas to avoid defaulting on payments.
The relocation of 100 tonnes of gold, constituting nearly 25% of India’s reserves as of the end of March, was a intricate logistical feat that necessitated several months of careful planning and execution, the TOI report said. The operation required close collaboration among various government agencies, such as the finance ministry, RBI, and local authorities.
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To enable the transportation, the central government provided RBI with a customs duty waiver, relinquishing revenue on this national asset. Nevertheless, integrated GST, which is distributed among the states, was still imposed on the imports.
A dedicated aircraft was employed to convey the substantial quantities of gold, accompanied by extensive security measures. The initiative is anticipated to assist RBI in reducing some of the storage expenses paid to the Bank of England, although the savings are not substantial.
Within India, gold is securely stored in vaults situated in RBI’s old office building on Mint Road in Mumbai and in Nagpur.