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

Mumbai: India has transferred 100 metric tonnes of its gold reserves from the UK to domestic vaults in FY24, sources disclosed on Friday.

This move marks one of the most significant gold transfers for the country since 1991 when a substantial portion of the gold reserves was pledged to alleviate a foreign exchange crisis, necessitating its relocation from vaults.

According to official data, India’s overall gold reserves surged by 27.46 metric tonnes in FY24, bringing the total to 822 metric tonnes.

Sources indicated that a considerable portion of the country’s gold reserves is stored overseas, including holdings with the Bank of England, like other nations.

With the movement of 100 metric tonnes to India, the total quantity stored domestically now exceeds 408 metric tonnes, nearly balancing the local and foreign holdings.

The central bank’s annual report for FY24, released on Thursday, revealed that over 308 metric tonnes of gold serves as backing for issued notes, while an additional 100.28 tonnes is held domestically as an asset of the banking department. The report also noted that 413.79 metric tonnes of gold reserves are held abroad.

Sources cited a strategic decision to diminish overseas holdings due to consistent gold purchases in recent years, in line with standard review procedures. In 2009, India procured 200 tonnes of gold from the International Monetary Fund and has since been acquiring the precious metal from the secondary market as part of its efforts to diversify foreign exchange assets.

Given the substantial value involved, officials from the Ministry of Finance, the RBI, and other agencies executed the gold transfer with utmost secrecy, as per sources.

Currently, domestically held gold is securely stored in high-security vaults and facilities located in Mumbai and Nagpur.