Skip to main content

RBI exploring longer tenure gold loans

By
The Reserve Bank of India ( RBI) is exploring whether the present gold loan tenure of a 180- day maximum should be extended to a year or more.
The central bank has twice met jewellers and banks active in gold loans on the issue. Those in the trade say they expect a decision very soon.
Jewellers recently put up their case for a higher tenure. “ Gold metal loans are treated equally with cash credit or any working capital loans. Since these (latter) loans are reviewed and limits renewed every year, the same principle should be applicable to gold metal loans,” said Sanjeev Agarawal, co- chairman of the committee on gems and jewellery at the Federation of Indian Chambers of Commerce and Industry.
Banks usually take gold on lease from abroad and lend that to local jewelers -- globally, gold is available on leases of one to three years. And, the cost of alease globally is around one per cent; in India, it depends upon creditworthiness of a jeweller and banks charge interest of 3.5 to 6.5 per cent. Some of the banks getting gold under the governments recent monetisation scheme have also sought a longer tenure for gold loans.
All banks dont agree on this. “ We can monitor the performance of gold metal loans if renewed every six months,” said a banker.
Sources believe RBI could extend the gold term loan limit to a year or two. Or that RBI could fix an upper limit cap and leave it to a bank to decide the tenure. Banks have another issue with a higher tenure loan, as they will lose the extra revenue when gold is quoted at a premium in the local market; they also get a small fee when a gold metal loan is renewed.
A higher tenure would be good news for the jewellery industry, currently in some stress. A longer tenure could also enable them to buy from the spot market at a discount, if available. Industry sources believe RBI might allow banks to buy gold from accredited Indian refiners, with the ongoing process of promoting mandatory hallmarking.
Business Standard New Delhi, 28th May 2016

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more