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RBI on lending against gold

The RBI said 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

June 07, 2013 12:32 IST | India Infoline News Service
The Reserve Bank of India (RBI) directed all state and central co-operative banks that while granting advance against gold coins, banks should ensure that the weight of the coin(s) does not exceed 50 grams per customer.

It is proposed to restrict the facility of advances against the security of gold coins per customer to gold coins weighing up to 50 gms, the RBI said in a notification on Thursday.

The RBI further said 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.

At present, banks are allowed 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 and units of gold mutual funds.

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