The central bank has also asked banks to stop accepting credit cards for purchasing of gold at their branches. The decision is going to affect many large banks who are aggressively promoting credit card business, offering to convert any purchase of over Rs 10,000 into EMIs.
Media report quoted the retail head of a foreign bank as saying "The central bank does not want banks to encourage gold buy. This has been communicated to us in several interactions. So, we have stopped offering the EMI facility on gold purchases."
The move comes after RBI asked banks not to lend against gold coins. On the other hand, government has raised the import duty several times to curb imports of gold which is widening the country's current account deficit.