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Informist, Thursday, Dec. 4, 2025

 

--RBI issues amendments to gold metal loan scheme 
--RBI: Amendments to gold metal loan scheme effective from Apr 1 

 

MUMBAI – The Reserve Bank of India Thursday notified amendments to its credit facilities directions regarding the disbursal of gold metal loans. The amendments will come into effect from Apr. 1.

 

"Objective of these Amendment Directions is to ensure a streamlined and harmonised set of regulations for domestic and exporter jewellers alike for an enhanced ease of doing business, as also to develop a supervisory MIS on Gold Metal Loans," the RBI said.

 

Among the gamut of gold metal loans, the regulator said that loans of gold sourced through the gold monetisation scheme will be "GMS-linked GML" and can be repaid in either gold or cash or a combination of both. "Import-linked GML" are loans where the gold metal is sourced as an import and can only be repaid in cash.

 

Nominated banks can offer the "import-linked GML" to all jewellery manufacturers and sellers in domestic or export markets. Jewellers who do not manufacture can avail gold metal loans only for outsourcing their manufacturing. Meanwhile, "GMS-linked GML" can be extended to such jewellers as well as to MMTC Ltd. for minting India Gold Coins.

 

Lenders internal policies on gold metal loans must prescribe the kinds of loans they want to give out, per borrower and overall outstanding gold metal loan limits, and detailed due diligence requirements towards borrowers. Gold metal loans will be subject to capital adequacy and other prudential requirements. The gold lent shall be valued daily for all prudential and accounting purposes.

 

The borrower should not have any direct or indirect liability to the source of the gold metal used by the bank to extend the loan, the directions said. Banks may give out gold metal loans to jewellers who are not regular customers on receipt of a stand-by letter of credit or bank guarantee of other scheduled commercial banks.

 

"A bank shall put in place mechanism to monitor on an ongoing basis the exposure level and the end-use of the gold being lent to borrowers under GML scheme and ensure that the gold borrowed under GML scheme is neither sold nor exported by borrowers in the form of primary gold," the regulator said. The lender can decide on interest rates based on its costs and charge a relevant spread.

 

Gold metal loans to non-exporting jewellers shall be capped at 210 days, while lending to exporters will be subject to the extant Foreign Trade Policy and its handbook of procedures. Repayment of such loans must be made in Indian rupees except for "GMS-linked GML", where the principal can be repaid in whole or part through gold of permissible standards. A bank will have to report its gold metal loans to the RBI on a quarterly basis by the seventh day of the following month, the amended directions said.  End

 

Reported by Aaryan Khanna

Edited by Ashish Shirke

 

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