No advances can be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded funds & units of gold mutual funds.!
In a bid to curb demand for gold, the Reserve Bank of India (RBI) recently imposed restrictions on banks and Non - Banking Finance Companies (NBFCs) for providing loans against gold coins as well as units of gold ETFs (Exchange Traded Funds) and mutual funds (MFs).
RBI said in a notification to banks “…It is advised that while granting advance against the security of specially minted gold coins sold by them, banks should ensure that the weight of the coin does not exceed 50 grams per customer,”
Also banks have been asked to ensure that the amount of loan to any customer against gold ornaments, gold jewellery and gold coins (weighing up to 50 grams) should be within the board approved limit.
As specially minted gold coins sold by banks may not be in the nature of bullion or / primary gold, there would be no objection to the bank granting loans against these coins, it added.
The central bank further said that banks can not give advances against gold Exchange Traded Funds (ETFs) & units of gold Mutual Funds.
Banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks.
However, no advances can be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded funds & units of gold mutual funds.
Central Government has taken several steps recently, including raising import duty, to curb the inbound shipments of gold. RBI too had put restrictions on banks on gold imports, which has led to forex outflow and widening of the Current Account Deficit.
While there may not be any objection to grant of advances against specially minted gold coins sold by banks, there is a risk that some of these will weigh much more, there by circumventing the RBI’s guidelines regarding restrictions on grant of advance against gold bullion, it said.
In a separate notification, RBI said no advances should be granted by NBFCs for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold ETF & units of gold Mutual Funds.
Worried over widening Current Account Deficit (CAD), Finance Minister Mr. P. Chidambaram last week had indicated that the government and the RBI could take more steps to check gold imports.
“Some more steps, if necessary, would have to be taken, but I appeal to the people of India to contain their passion for gold” Mr. P. Chidambaram had said.
Gold imports jumped by 138% to USD 7.5 billion last month, the highest so far this year, pushing up the trade deficit to USD 17.7 billion.
Src: PTI
No comments:
Post a Comment