RBI tightens screws on gold funding, imports

The Reserve Bank of India on Friday tightened the norms for importing gold and funding for buying the yellow metal.

In its Monetary Policy Statement for 2013-14, the central bank restricted the import of gold on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery. The detailed guidelines will be issued by end-May 2013.

The central bank has also put more curbs on lending against gold. Banks would no longer grant advances 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.

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

RBI has also restricted the facility of advances against the security of gold coins per customer to gold coins weighing up to 50 gms.