 "RBI tightens screws on gold loans by banks")
Amid a steep fall in gold prices recently and the resultant risks to the system, the RBI on Friday further tightened screws on gold loans by banks, restricting them to finance import of the precious metal only for gold jewellery exporters.
Subbarao further said that the recent fall in gold prices will increase consumption demand but will check investment demand and speculation.
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The Reserve Bank also restricted the lending against gold coins up to 50 grams only.
“With a view to reducing demand for gold for domestic use, it has been decided to restrict gold import on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery,” RBI said in its annual monetary policy review for 2013-14.
The apex bank also said detailed guidelines on the same will be issued by the end of the month.
It can be noted that in the past two months, as the global economic sentiment improved, gold lost its glitter and lost almost 25 percent.
Agencies