DBOD.No. IBS.1816/23.67.001/98-99

February 4, 1999

Magh 15, 1920 (Saka)


The Chairmen/Chief Executives of all the Banks authorised to import gold/silver/platinum

Dear Sir,

Sale of gold/silver/platinum- payment in cash

Please refer to our circular DBOD. No. BP. BC. 114/C. 469(81)-91 dated 19 April 1991 which stipulates that in order to curb the misuse of banking channels for violation of fiscal laws and evasion of taxes, Demand Drafts, Mail Transfers, Telegraphic Transfers and Travellers Cheques for Rs. 50,000/- and above should be issued by banks only by debit to the customer's account or against cheques or other instruments tendered by the purchaser and not against cash payment.

2. Some of the banks authorised to import gold/silver/platinum have sought clarification from us whether the instructions contained in our circular mentioned above are also applicable in the case of retail sale of gold by the authorised banks. It is clarified that the above instructions are applicable to sale of gold/silver/platinum also. Banks should, therefore, ensure that payment towards sale of gold/silver/platinum of the value of Rs. 50,000/- and above is received only by debit to the customer's account or against cheques or other instruments tendered by the purchaser and not in cash.

Yours faithfully,

(Devaki Muthukrishnan)

General Manager