Gold Import Scheme Was Eased On UPA Government's Advice: Ex-RBI Officer

Former RBI deputy governor HR Khan was questioned in connection with a gold import scheme that was launched by the earlier UPA government.

Don't know whether my question is a diversion, the CBI can answer that, HR Khan told NDTV

Mumbai: A day after the Central Bureau of Investigation (CBI) that is probing the PNB fraud case questioned former RBI Deputy Governor HR Khan, the former central bank official has told NDTV the interrogation was to check on a gold import scheme launched by the earlier UPA government.

"I would like to clarify that they, the CBI, had called me to check on the 80:20 gold import scheme. And nothing to do with involvement in Letters of Undertakings (LoUs), import of diamonds and the so-called firms involved in the scam," Mr Khan told NDTV in an exclusive interview.

The 80:20 scheme was launched by the UPA in August 2013, when the government was trying to curb gold imports to tackle the current account deficit. According to the scheme, private traders were allowed to export 20 per cent of the imported gold as jewellery and retain the rest for domestic use.

The scheme was scrapped by the NDA government in November 2014.

On the CBI's radar is a circular issued by the RBI in May 2014 that was signed by Mr Khan, days before the Modi government assumed office.

The NDA government has alleged that P Chidambaram, who was Finance Minister then, had diluted the scheme to benefit some private firms, including Gitanjali -- a company promoted by Mehul Choksi who is among the key accused in the Rs 13,000 crore PNB fraud case also involving celebrity designer Nirav Modi.

"They (CBI) had got some notes on the circular issued by RBI relaxing some of the terms and conditions. The circular was issued by the RBI based on advice from the government," Mr Khan told NDTV.

Expanding on the relaxations made to the scheme, Mr Khan said it was done partly to take care of the "squeeze of gold in the market that led to a lot of black marketing".

"There were a lot of representations that were received by the government and they decided to relax this 80-20 scheme and give permissions to those who were earlier importing gold so that domestic requirement was met," he added.

Earlier this week, the CBI questioned three chief general managers and one general manager of the RBI regarding the scheme.

Asked about the direction of the CBI probe, Mr Khan said "I don't know whether it is something to do with diversion".

Suggesting that the agency should be focused, Mr Khan said, "This is something to do with diamond and pearl import whereas what we are talking about here is 80-20 gold import scheme. I think we should be a little circumspect in what we are trying to do here".
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