Loans against Gold Ornaments and Jewellery for Non-Agricultural End-uses
RBI has issued guidelines that
Loans extended against pledge of gold ornaments and jewellery, for other than agricultural purposes, where both interest and principal are due for payment at maturity of the loan will be subject to the following conditions:
4. For the purpose of valuation of gold, banks may use the historical spot gold price data publicly disseminated by a commodity exchange regulated by the Forward Markets Commission on a consistent manner as per their Board approved policy, in addition to the prices disseminated by the India Bullion and Jewellers Association Ltd.
RBI has issued guidelines that
Loans extended against pledge of gold ornaments and jewellery, for other than agricultural purposes, where both interest and principal are due for payment at maturity of the loan will be subject to the following conditions:
-
Banks, as per their Board approved policy, may decide upon
the ceiling with regard to the quantum of loans that may be granted
against the pledge of gold jewellery and ornaments for non-agricultural
end uses;
-
The tenor of the loans shall not exceed 12 months from the date of sanction;
-
Interest will be charged to the account at monthly rests
and may be recognised on accrual basis provided the account is
classified as ‘standard’ account. This will also apply to existing
loans;
-
Such loans shall be governed by extant norms pertaining to
income recognition, asset classification and provisioning which shall
be applicable once the principal and interest become overdue.
4. For the purpose of valuation of gold, banks may use the historical spot gold price data publicly disseminated by a commodity exchange regulated by the Forward Markets Commission on a consistent manner as per their Board approved policy, in addition to the prices disseminated by the India Bullion and Jewellers Association Ltd.
