Gold Loan Tenor Extended to 270 Days Under FTP 2009-14
Current · Source: Reserve Bank of India · RBI/2011-12/411 · issued 27 Feb 2012 · ~2 min read
Quick answerRBI extends maximum gold loan tenor from 240 to 270 days, aligning with FTP 2009-14: 90 days for manufacture/export plus 180 days for price fixing and repayment. SBLC tenor must match this new loan period.
The rule, in the simplest words
Gold loans now have a maximum time of 270 days (instead of 240 days) to be fully paid back.
The 270 days are split into two parts: 90 days for making and exporting the gold items, and 180 days for setting the price and paying back the loan.
This change follows the government's Foreign Trade Policy (FTP) for 2009-14, which gives exporters more time to finish their work.
How it plays out — a real example
A gold-loan officer in Mumbai, Priya, updates her bank's loan system so that a jeweler exporting gold jewelry gets a maximum of 270 days to repay. She explains to the jeweler: 'You now have 90 days to make and ship the jewelry, and then 180 more days to fix the gold price and pay back the loan. Also, the bank guarantee we issue for your gold import will match this 270-day period.'
What changed
The maximum gold loan tenor increased from 240 days (60 days manufacture/export + 180 days price fixing/repayment) to 270 days (90 days manufacture/export + 180 days price fixing/repayment) as per the Foreign Trade Policy 2009-14. The Standby Letter of Credit (SBLC) tenor for gold imports on loan basis must now align with this revised 270-day period.
What it means for you
Banks must update their gold loan product terms and SBLC issuance guidelines to reflect the new 270-day maximum tenor. This change provides exporters more time for manufacturing and export (90 days instead of 60) while keeping the price fixing and repayment window unchanged at 180 days. All other conditions from the 2005 circular remain in force.
What you must do
Update internal gold loan policies to set maximum tenor at 270 days (90 days manufacture/export + 180 days price fixing/repayment).
Ensure SBLC tenors for gold imports on loan basis are aligned with the new 270-day loan period.
Communicate the revised tenor to all constituents and customers dealing with gold loans.
Monitor compliance with FTP 2009-14 and any future government updates on gold loan tenors.
Who it affects
Category-I Authorised Dealer Banks, Gold importers and exporters using loan basis imports, Customers availing gold loans for export purposes
❓ Common questions
What is the new maximum tenor for gold loans under this circular?
The maximum tenor is now 270 days, comprising 90 days for manufacture and export plus 180 days for price fixing and repayment, as per the Foreign Trade Policy 2009-14.
Does this circular change the SBLC tenor requirement?
Yes, the SBLC tenor for gold imports on loan basis must now match the revised gold loan tenor of 270 days, wherever required.
Are any other terms from the 2005 circular affected?
No, all other terms and conditions from the A.P. (DIR Series) Circular No. 34 dated February 18, 2005 remain unchanged.
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/411
A.P. (DIR Series) Circular No. 83
February 27, 2012
To
All Category – I Authorised Dealer Banks
Madam / Sir,
Import of Gold on Loan Basis-
Tenor of Loan and Opening of Stand - By Letter of Credit
Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to the A.P.(DIR Series) Circular No. 34 dated February 18, 2005 , in terms of which the maximum tenor of gold loan was notified as 240 days consisting of 60 days for manufacture and exports +180 days for fixing the price and repayment of gold loan as per the Foreign Trade Policy 2004-2009 of the Government of India and that the tenor of the Standby Letter of Credit (SBLC), for import of gold on loan basis, where ever required, should be in line with the aforesaid tenor of gold loan.
2. Attention of the AD Category –I banks is also invited to para 4A 23.2 and para 4A 23.3 of the Hand Book of Procedures (HBP) Vol. I of the Foreign Trade Policy (FTP) 2009-14 which states that, "the export has to be completed within a maximum period of 90 days from the date of release of gold on loan basis ", and that, " the exporter shall have flexibility to fix the price and repay gold loan within 180 days from date of export". Accordingly, the maximum tenor of gold loan becomes 270 days at present (i.e. 90 days for manufacture and export + 180 days for fixing the price and repayment) as per FTP 2009-14 .
3. AD Category-I Banks may, accordingly, note to comply that (i) the maximum period of gold loan shall be as per the Foreign Trade Policy 2009-14 or as notified by the Government of India from time to time, in this regard and (ii) the tenor of SBLC, for import of gold on loan basis, where ever required, should also be in line with the tenor of gold loan.
4. All the other terms and conditions of the A.P. (DIR Series) circular No. 34 dated February 18, 2005 shall remain unchanged.
5. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
6. The directions contained in this circular have been issued under Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/411 · issued 27 Feb 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Category-I Authorised Dealer Banks, Gold importers and exporters using loan basis imports, Customers availing gold loans for export purposes), your first concrete step on “Gold Loan Tenor Extended to 270 Days Under FTP 2009-14” is: “Update internal gold loan policies to set maximum tenor at 270 days (90 days manufacture/export + 180 days price fixing/repayment).” (RBI issued this 27 Feb 2012).
Circular: RBI/2011-12/411 -- Gold Loan Tenor Extended to 270 Days Under FTP 2009-14
Issued: 27 Feb 2012
Action required: Update internal gold loan policies to set maximum tenor at 270 days (90 days manufacture/export + 180 days price fixing/repayment).
Action required: Ensure SBLC tenors for gold imports on loan basis are aligned with the new 270-day loan period.
Action required: Communicate the revised tenor to all constituents and customers dealing with gold loans.
Action required: Monitor compliance with FTP 2009-14 and any future government updates on gold loan tenors.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7024&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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