No loan against gold ETFs and MFs: RBI

India Infoline News Service | Mumbai |

Banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks

The Reserve Bank of India (RBI) on Monday said banks and non-banking financial companies (NBFCs) would not be allowed to extend loans against units of gold exchange traded funds (ETFs) and gold mutual funds.

“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 exchange traded funds (ETFs) and units of gold mutual funds,” the central bank said in a notification.

In its Monetary Policy statement 2013-14, RBI suggested that banks restrict the facility of advancing loan against gold coins to a maximum weight of 50 grams.

Banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks.

 

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