What changed
RBI now mandates that state/central co-operative banks must ensure gold coins accepted as collateral per customer weigh up to 50 grams. Previously, there was no explicit weight cap on gold coins. The move aligns with the Monetary Policy Statement 2013-14 to close a loophole where heavy coins were used to bypass restrictions on lending against gold bullion.
What it means for you
Co-operative banks must update their gold loan policies to enforce a 50-gram per customer limit on gold coin collateral. Loans against gold ornaments and jewellery are unaffected but must stay within board-approved limits. This reduces risk of disguised bullion lending and ensures compliance with RBI's broader gold loan framework.
What you must do
- Update gold loan policy to cap gold coin collateral at 50 grams per customer.
- Train loan officers to verify coin weight and reject any coin exceeding 50 grams.
- Ensure all gold loans (ornaments, jewellery, coins) adhere to board-approved limits.
- Review existing gold coin loan portfolio and adjust any exposures above 50 grams.
- Communicate the new restriction to branches and customers immediately.
Who it affects
State co-operative banks, Central co-operative banks, Gold loan customers of co-operative banks, Bank loan officers handling gold collateral
Does this apply to loans against gold ornaments and jewellery?
No, the 50-gram limit applies only to gold coins. Loans against gold ornaments and jewellery remain permitted, subject to board-approved limits.
What happens if a customer already has a gold coin loan above 50 grams?
The source does not address existing loans; it only applies to new advances. Banks should ensure future compliance.
Can we lend against gold coins weighing exactly 50 grams?
Yes, coins weighing up to 50 grams per customer are allowed. Ensure the weight is verified and documented.