The Reserve Bank of India, on Friday, directed State and Central co-operative banks not to grant loans for purchase of gold in any form to check the significant rise in import of the precious metal in recent years.
“In view of the concerns..., it is reiterated that State and Central co-operative banks should not grant any advance for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded funds (ETF) and units of gold mutual funds,” the RBI said in a notification.
At present, these banks are permitted to grant loans against pledge of gold ornaments, but not permitted to grant any advance for purchase of gold in any form.
They grant loans for various purposes against the security of gold/gold ornaments as part of their lending policy.
