RBI bars financing of gold purchases

MUMBAI Tue Nov 20, 2012 3:58pm IST

1 of 2. A man drinks next to the logo of the Reserve Bank of India (RBI), outside its head office in Mumbai April 20, 2010.

Credit: Reuters/Arko Datta/Files

Related Topics

MUMBAI (Reuters) - Indian banks have been asked by the Reserve Bank of India to restrict financing of purchases of gold in the form of bullion, jewellery and coins or units of exchange traded funds, in the latest of the measure to restrict gold imports to counter ballooning fiscal deficit.

"This won't impact gold trade as only 1 percent of traders used to depend on this form of financing," said Kumar Jain, vice chairman of Mumbai Jewellers Association, which groups 15,000 jewellers.

Industry officials said traders hypothecate the gold stocks with the banks to finance their working capital requirements.

Gold imports into India rose 9 percent to 223 tonnes in the September quarter, after a decline of more than 50 percent in the first half to June as doubling of import duty and record high prices dented sales. (Reporting by Siddesh Mayenkar; Editing by Anand Basu)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage