What changed
RBI clarified that import of gold against suppliers/buyers credit and on unfixed price basis must adhere to the earlier restrictions: 100% cash margin for LCs and DP basis only. No credit in any form is allowed for gold imports, except gold on loan basis for on-lending to jewellery exporters.
What it means for you
Banks must ensure no credit facility is extended for gold imports, tightening liquidity for importers. This reinforces RBI's stance to curb speculative gold imports and manage current account deficit. Only jewellery exporters can access gold on loan basis, keeping their supply chain intact.
What you must do
- Ensure all gold import LCs are opened only with 100% cash margin.
- Verify that all gold imports are processed on Documents against Payment (DP) basis, not DA.
- Block any form of credit (suppliers/buyers credit, unfixed price) for gold imports.
- Allow gold on loan basis only for on-lending to jewellery exporters, as per scheme.
- Update internal systems and train staff to enforce these restrictions immediately.
Who it affects
AD Category I Banks, Nominated banks/agencies for gold import, Premier/star trading houses importing gold, Gold jewellery exporters
Can we still provide suppliers credit for gold imports?
No, suppliers credit is not permitted. All gold imports must be on 100% cash margin and DP basis, with no credit in any form.
Is gold on loan basis still allowed?
Yes, gold on loan basis is allowed only for nominated banks/agencies to on-lend to jewellery exporters, as per the existing scheme.
Does this apply to all forms of gold?
Yes, the restrictions apply to all forms of gold imports, including on unfixed price basis, except the gold on loan scheme for exporters.