RBI to frame policy for silver loans similar to gold metal loans

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Several banks have approached the Reserve Bank of India in order to establish a framework for silver metal loans that is similar to the existing gold metal loans. According to a report, jewellery producers have asked banks to extend loans for the purchase of silver, silver goods, and jewellery manufacturing.

Banks can make gold loans to jewellery exporters or domestic makers under the current Gold Monetisation Scheme, 2015. The loan, which is equal to the value of the borrowed gold, must be repaid in rupees. Borrowers can, however, repay a portion of the loan in actual gold in lots of one kilogramme or more.

According to the official quoted above, India’s silver exports reached Rs 25,000 crore last year, and there is a considerable demand for loans in the sector.

According to the most recent data from India’s Gem Jewellery Export Promotion Council, silver jewellery exports increased 16.02 percent during fiscal year 2022-23 (FY23) to Rs. 23,492.71 crore, up from Rs.20,248.09 crore the previous year.

The RBI had previously warned lenders that a lack of effective monitoring measures and a failure to ensure the end use of GML had resulted in cases of fraud by unscrupulous jewellers. It had urged banks to analyse the credit requirements of gold metal loan clients, taking into account the borrowers’ track record and creditworthiness, the manufacturing trade cycle, and the collateral securities on offer.

Also Read: https://clipper28.com/en/praful-patel-supriya-sule-ncp-working-presidents/


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