PAN card must for high-value gold purchases: RBI panel

Feb 06 2013, 18:00 IST
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A Reserve Bank committee has suggested cheque payment for gold purchase beyond a threshold. A Reserve Bank committee has suggested cheque payment for gold purchase beyond a threshold.
SummaryPanel also proposes restriction on gold loans and check on NBFCs dealing with gold loans.

exchange, widened to a record high of 5.4 per cent of GDP in the July-September quarter.

"Large gold imports, if unchecked, can potentially threaten the external stability and, therefore, there is an unambiguous need to moderate them," RBI report said.

To contain gold import, the government last month hiked import duty on gold to 6 per cent, from 4 per cent. It also linked gold Exchange Traded Fund (ETF) with bank gold deposit scheme to enable MFs to unlock their physical gold and invest in gold-linked schemes offered by banks.

The panel further said there is a "need to reduce gold loan NBFCs' heavy borrowings from banks so as to reduce their interconnectedness with formal financial system gradually".

"There is a need to thoroughly review the operational practices followed by gold loan NBFCs," the panel said adding there are concerns on some gold loan NBFCs have been raising public deposits "surreptitiously" through incorporated bodies.

It also suggested that banks may expand their gold jewellery loan portfolio to monetise the stock of idle gold and there should not be any limit on advances against gold jewellery and gold coins by individuals.

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