The GML is paid on an amount equal to the value of the gold borrowed in Indian Rupees. The Reserve Bank has now reviewed these rules.
Gold Monetization Scheme
The Reserve Bank of India (RBI) asked banks to provide an option to jewelery exporters and domestic gold jewelery manufacturers to repay part of the Gold (Metal) Loan (GML) in the form of gold. GML is paid on an amount equal to the value of the gold borrowed in Indian Rupees. The Reserve Bank has now reviewed these rules.
According to the circular of the Reserve Bank, banks should give the option of returning a part of the gold loan in the form of one kg or more gold to the creditors. However, it will have some conditions.
Jewelery manufacturers may get GMS
As per the extant instructions, banks authorized to import gold and authorized banks participating in the Gold Monetization Scheme, 2015 (GMS) can provide GML to jewelery exporters and domestic manufacturers of gold jewellery.
One of the conditions is that the GML is enhanced by locally acquired or GMS-associated gold. Also, the repayment was to be done using locally procured IGDS (India Good Delivery Standard) / LGDS (LBMA’s Good Delivery Standards) gold and the yellow metal was to be delivered directly to the bank on behalf of the borrower through the refiner or central agency with the involvement of the borrower. To be delivered without.
Another condition is that the loan agreement should state the options to be exercised by the borrower, acceptable norms and mode of delivery of gold for repayment. RBI asked banks to suitably incorporate all aspects in the board approved policy governing GML along with risk management measures.
read this also- Deposit Rs 199 in this scheme of Post Office, you will get Rs 3 lakh 10 thousand on maturity, know full details
.
