The Cabinet Committee on Economic Affairs on Wednesday approved in principle a ‘gold policy’ to bring the trade of the precious metal under a regulatory framework.

The committee gave the nod to the policy placed by the Commerce Ministry at a meeting held with Finance Minister AMA Muhith in the chair, reports the UNB.

‘We’ve approved in principle the policy. Now, it’ll go to the Cabinet to get the final approval of the government,’ Muhith said after the meeting.

Once the Cabinet approved the policy, it will come into effect and traders will import gold after taking licences from the Bangladesh Bank, he said.

While briefing reporters on the outcome of the meeting, Additional Secretary of the Cabinet Division Mustafizur Rahman said no one will be allowed to import gold bars without having licence from the central bank once the policy comes into effect.

He said the common people can bring a certain amount of gold in the shape of ornaments from abroad. ‘But they won’t be allowed to bring gold bars.’ 

Mustafizur said the main objective of the policy is to make the import and export of the gold easy and ensure transparency and accountability in its trade in the country.

He said the export of gold and gold ornaments through value addition has been encouraged in the new policy.

The existing rules allow the import of gold subject to permission from the Bangladesh Bank. But, in most cases, gold is imported through illegal channels.

The policy mentioned that the country’s annual demand for gold hovers between 20 and 40 tonnes. Almost 80 percent of the demand is met with smuggled gold and the rest from recycled one, depriving the government of a huge amount of tax. This also creates scopes for money-laundering and accumulation of black money.

Industry insiders say many countries, including India, earn billions of dollars by exporting gold ornaments, but Bangladesh’s export earning in this sector is abysmally low.

In 2016, the total export of gold ornaments was $638 billion across the globe. Of the amount, India’s export amounted to around $42 billion.

During the period, Bangladesh exported gold ornaments worth only $672.

The transaction for smuggled gold is usually done through Hundi.

The government has moved to formulate the gold policy following unabated import of gold through illegal channels. 

As part of the move, the Finance Ministry last year urged the Transparency International Bangladesh (TIB) to place its recommendations for formulating a gold policy.

On the basis of TIB recommendations, the Commerce Ministry formed a nine-member committee with representatives from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), TIB, gold traders and ministries and agencies concerned to formulate the draft gold policy.