RBI puts restrictions on bank loans against gold

RBI puts restrictions on bank loans against gold
In order to contain the demand for gold, Reserve Bank of India (RBI) implemented restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs and mutual funds.

In a notification to banks, RBI said, "...it is advised that while granting advance against the security of specially minted gold coins sold by them, banks should ensure that the weight of the coin does not exceed 50 grams per customer."

Banks have also been asked to ensure 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.

As specially minted gold coins sold by banks may not be in the nature of bullion or primary gold, there would be no objection to the bank granting loans against these coins, it added.

RBI further said that banks cannot give advances against gold Exchange Traded Funds (ETFs) and units of gold Mutual Funds.

Read more about: rbi, gold loan
Story first published: Tuesday, May 28, 2013, 9:30 [IST]
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