Gold loans can be repaid in gold



Mumbai: Reserve Bank of India (RBI) allowed the banks to return some gold metal loan advances in physical gold. Current regulations demanded from creditors to collect debts on gold loans in rupees is equivalent to yellow metal borrowed. Banks that have received permission to import gold and participate in monetization of gold the scheme is allowed to provide gold loans assisted jewelers as well as exporters
The move is expected to help with import substitution, promote Indian refined gold and help jewelers meet their commitments with gold reserves. The option will only be available to potential borrowers as RBI rules require the loan agreement to mention that the option is available to the borrower and must include the required gold standard. The payment must be made using the local Indian metal that is standard for the gold supply and must be delivered to the bank by the refiner or central agency on behalf of the borrower. The gold monetization scheme was launched in 2015 by the government after importing gold. the yellow metal approached its peak of 1000 tons.


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