The Reserve Bank of India (RBI) has brought back more than 100 tonnes of gold from Britain and transferred it to its reserves. According to the report of Business Today, the same quantity of yellow metal can be brought into the country again in the coming month. This gold pledged in the year 1991 has been included in the stock of RBI for the first time. 

More than half of RBI's gold reserves are kept safely abroad with the Bank of England and the Bank of International Settlements. About one-third of this is kept domestically. Bringing gold from Britain to India will also help the Reserve Bank of India in saving storage costs (RBI Gold Stock Cost), which is paid to the Bank of India. 

Gold was pledged in 1991 
According to annual data released by the RBI, as of March 31, 2024, the central government had 822.10 tonnes of gold as part of its foreign exchange reserves, which was more than 794.63 tonnes during the same period last year. In 1991, the Chandrashekhar government had mortgaged gold to deal with the balance of payments crisis. Between July 4 and 18, 1991, the RBI had pledged 46.91 tonnes of gold with the Bank of England and the Bank of Japan to raise $400 million. 

India bought a lot of gold! 
The central bank had purchased 200 tonnes of gold from the International Monetary Fund (IMF) about 15 years ago. In 2009, during the tenure of the UPA government, when Manmohan Singh was the Prime Minister, India had bought 200 tonnes of gold worth $6.7 billion to diversify its assets. Not only this, there has been a continuous increase in the stock of gold purchased by the Reserve Bank in the last few years. 

Why does RBI buy gold? 
The purpose of holding gold in stocks by the central bank is primarily to diversify its base of foreign currency assets as a hedge against inflation and foreign exchange risks. RBI has started collecting gold from the market regularly since December 2017. The target was to increase the share of gold in the country's total foreign exchange reserves from 7.75 per cent at the end of December 2023 to about 8.7 per cent by the end of April 2024. 

Where does RBI keep gold? 
Within the country, gold is kept in the safes located at the RBI Building on Mint Road in Mumbai and Nagpur. According to the World Gold Council report, global central banks hold about 17 per cent of all the gold ever mined and by the end of 2023, reserves will exceed 36,699 metric tons (MT).

When did India pledge its gold?
In the year 1991, the country had no foreign currency left to import. Then India took a loan of 2.2 billion dollars by mortgaging its 67 tonnes of gold. Former Governor C Rangarajan has told in his book that the government had decided to mortgage the gold, and a charter plane was standing at the Mumbai airport. This gold was kept in this plane, the plane went to England with the gold. Then India got the loan. After that India got the mortgaged gold redeemed, and after that gradually the foreign exchange reserves of the country also increased.