The Reserve Bank of India extended restriction on gold
import on consignment basis to all nominated agencies involved in gold imports
including star trading houses, besides further tightening gold import
procedures. Earlier on May 13, the RBI had announced its decision to restrict
gold imports on consignment basis by banks, only to meet the genuine needs of
the exporters of gold jewellery. "It has now been decided to extend the
provisions of this circular to all nominated agencies/ premier/star trading
houses who have been permitted by government of India to import gold." The
RBI said in a circular issued to bank on Tuesday. Accordingly, any import of
gold on consignment basis by both nominated agencies and banks shall now be
permissible only to meet the needs of exporters of gold jewellery.
The circular also states that "All Letters of Credit
(LC) to be opened by Nominated Banks / Agencies for import of gold under all
categories will be only on 100 per cent cash margin basis." Besides, all
imports of gold will have to be on Documents against Payment (DP) basis and
gold imports on Documents against Acceptance (DA) basis will not be permitted.
These restrictions will however not apply to import of gold to meet the needs
of exporters of gold jewellery. This is the third time in the last one month
that RBI has come out with new restrictions for gold import for banks. Earlier
on May 27, the banking regulator had restricted banks from extending loans
against gold ETFs and units of gold mutual funds.
These restrictions are in addition to the proposal made in
its annual monetary policy statement on May 04, which said banks should ensure
that the weight of the gold cosin does not exceed 50 grams per customer and the
amount of loan to any customer against gold ornaments, gold jewellery and gold
coins should be within the Board approved limit. The central bank also notified
the proposal. In a separate circular on May 27 had also clarified that 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 ExchangeTraded Funds (ETF) and units of gold Mutual Funds.
Source : Economic Times
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