What changed
RBI observed that some nominated banks had tie-up arrangements with non-nominated banks, NBFCs, or co-operative banks for retailing imported gold or gold coins. The central bank has now explicitly barred such arrangements, effective immediately.
What it means for you
Nominated banks must now directly handle the retailing of imported gold and gold coins without involving third-party entities like NBFCs or co-operative banks. This restricts distribution networks and may increase operational burden on banks, but ensures tighter regulatory oversight and reduces risks of misuse.
What you must do
- Review and terminate any existing tie-up arrangements with non-nominated banks, NBFCs, or co-operative banks for gold retailing.
- Ensure all gold import retailing is conducted directly by the nominated bank without third-party intermediaries.
- Update internal compliance policies to reflect this prohibition and train relevant staff.
- Acknowledge receipt of this circular to RBI as instructed.
Who it affects
Nominated banks authorised to import gold/silver, Non-nominated banks, Non-banking financial companies (NBFCs), Co-operative banks
Does this ban apply to all types of gold imports?
Yes, the prohibition covers tie-up arrangements for retailing imported gold and gold coins under the gold import authorisation scheme.
Can we still sell gold through our own branches?
Yes, direct retailing by the nominated bank through its own branches is permitted. The ban only applies to arrangements with external entities like non-nominated banks, NBFCs, or co-operative banks.
What is the effective date of this directive?
The circular was issued on May 8, 2007, and is effective immediately from that date.