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RBI/2005-06/196
DBOD.No.IBD.BC. 663 /23.67.001/2005-06
November 2, 2005
The Chairmen and CEOs of all Scheduled Commercial
Banks
(Excluding RRBs)
Dear Sir
Advances against Gold Ornaments and Jewellery
Please refer to our circular DBOD. No. BP.BC.
138/21.01.023/94 dated November 22, 1994 on the captioned subject as also earlier
circulars enclosed for ready reference.
2. As you are aware, hallmarking of gold
jewellery ensures the quality of gold used in the jewellery as to caratage,
fineness and purity. Therefore, banks would find granting of advances against
the security of such hallmarked jewellery safer and easier. Preferential treatment
of hallmarked jewellery is likely to encourage practice of hallmarking which
will be in the long-term interest of consumer, lenders and the industry.
3. Therefore, banks while considering granting
advances against jewellery may keep in view the advantages of hallmarked jewellery
and decide on the margin and rates of interest thereon.
4. Other conditions in respect of grant of
advances against gold ornaments and jewellery remain unchanged.
Yours faithfully
( P. Saran )
Chief General Manager
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