Bar loans against gold coins weighing above 50gm: RBI

India Infoline News Service | Mumbai |

Accordingly the bank has proposed to restrict the facility of advances against the security of gold coins per customer to gold coins weighing up to 50 grams

The Reserve Bank of India (RBI) has suggested that banks restrict the facility of advancing loan against gold coins to a maximum weight of 50 grams.

According to central bank, the move would imply that a customer cannot avail loans against gold coins that weigh more than 50 grams.

Banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks, RBI said in its Monetary Policy statement 2013-14.

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 and units of gold mutual funds, the RBI said.

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 coins would be weighing much more, thereby circumventing the Reserve Bank’s guidelines regarding restrictions on grant of advance against gold bullion, the central bank said.

Accordingly the bank has proposed to restrict the facility of advances against the security of gold coins per customer to gold coins weighing up to 50 grams.
The detailed guidelines for the same will be issued by end-May 2013.

 

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