This facility was so far available to select banks only and other big entities like star trading houses were barred from importing the metal.
As per the existing rules, importers can buy gold, provided 20 per cent of it is exported as finished products.
In July 2013, the RBI had imposed severe restrictions on gold imports in order to check burgeoning current account deficit (CAD) and the sliding rupee.
The central bank had tied imports with exports and prescribed a 20:80 formula.
The RBI in March had allowed five more banks to import gold under the 20:80 scheme. Star trading houses/ premier trading houses, which are registered as nominated agencies by the Director General of Foreign Trade, may now import gold under 20:80 scheme, RBI said.
Before the ban, nearly $3-5 billion worth of gold was imported in cash every month. Star trading houses used to account for a lions share of these imports.
The CAD, which had touched a record high of $ 88.2 billion or 4.8 per cent of GDP in 2012-13 is estimated to have come down to below $ 32 billion or 1.7 per cent of GDP in FY14. The rupee has strengthened to sub-59 level against dollar from a high of nearly 69 in August 2013. The decision to ease the restriction follows representations from jewelers, bullion dealers, banks, and trade bodies.
Taking into account such representations and in consultations with the Government of India, it has been decided to modify the guidelines for import of gold by the nominated banks, agencies and other entities, the RBI said.
The RBI has also allowed banks to give gold metal loans to domestic jewellery manufacturers, out of the eligible domestic import quota of 80 per cent.