Loans restricted to gold jewellery exporters

Amid a steep fall in gold prices recently and the resultant risks to the system, the Reserve Bank of India (RBI), on Friday, further tightened screws on gold loans by banks, restricting them to finance import of the precious metal only for gold jewellery exporters.

The RBI also restricted lending against gold coins up to 50 grams only.

“With a view to reducing demand for gold for domestic use, it has been decided to restrict gold import on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery,” the RBI said in its annual monetary policy review for 2013-14.

The apex bank also said detailed guidelines on the same will be issued by the end of the month.

“While there may not be any objection to giving advances against specially minted gold coins sold by banks, there is a risk that some of these coins would be weighing much more, thereby, circumventing the RBI norms regarding curbs on advances against gold bullion,” the RBI said.

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