The Reserve Bank of India (RBI) has moved 100 tonnes of gold into India from the Bank of England in the last fiscal as it looks to diversify storage.

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.

India has 822.10 tonnes of gold reserves at the end of 2023-24: 413.79 are tonnes held abroad and the rest in the country.

The UK’s central bank is the second largest custodian of the precious metal after the New York Federal Reserve, holding 166.8 million fine troy ounces in April 2024.

The annual report of the central bank for 2023-24 released on Thursday said over 308 tonnes are held in India
as backing for notes issued, while another 100.28 tonnes held as an asset of the
banking department.

According to 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 finance ministry, 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.

Sources said the development will not lead to any change in the way in which the RBI values the gold holdings.

Gold (including gold deposit) is valued on a daily basis at 90 per cent of the London Bullion Market Association (LBMA) gold price in dollar and rupee-dollar market exchange rate.

Unrealised valuation gains or losses are accounted for in currency and gold revaluation account.

Central banks globally have been increasing reserves held in gold, often seen as a hedge against currency volatility and geopolitical risks. The RBI decided to move gold to India as the stock was building up overseas, according to Reuters.