RBI measures to curb gold sale hurts small traders and artisans
Updated: Jul 01, 2013 03:48:48pm
Mumbai, Jul 1 (KNN) Moving a step further to curb gold imports, the Reserve Bank of India (RBI) has asked banks not to accept cards or allow EMI schemes for sale of gold coins, in an attempt to cut down on retail consumption too.
The move is likely to affect artisans and millions of small family shops who account for most of India’s jewellery business, having an adverse impact on the employment scenario.
According to a report, small-timers depending on the local market may find the going tough. While it could mean less work for artisans, it could also lead to domestic jewellers recycling old ornaments, leading to a negative impact on their finances. However, the same may not apply to large players.
RBI’s recent directive has asked banks not to convert gold purchases done through credit cards into equated monthly instalments (EMIs). It has also mandated that cards should not be accepted for purchase of gold coins at branches.
In order to attract the customers, many banks offer EMI facility on purchase of air tickets, mobile phones and gold jewellery on credit cards.
Along with the option of converting the payment dues into EMIs, some banks also have tie-ups with merchant establishments for offering more facilities like full or partial waiver of processing fees and interest.
Moreover, the central bank has asked banks not to push gold coin sales aggressively; the finance ministry wants public-sector banks to completely stop such sales. The state-run banks have already implemented it.
According to a media report, bankers said RBI had held discussions on EMIs offered on outstanding credit card bills for all kinds of purchases and would soon come out with specific guidelines on this. Banks might have to make more disclosures. It was still at the discussion stage, said a senior banker.
Earlier, RBI had also asked banks not to lend against gold coins weighing over 50 g.
Recently, there was an increase in import duty on gold in order to lower the demand for the yellow metal so that its import can be brought down.
Earlier, on May 13, RBI had restricted gold imports on consignment basis by banks. (KNN)
The move is likely to affect artisans and millions of small family shops who account for most of India’s jewellery business, having an adverse impact on the employment scenario.
According to a report, small-timers depending on the local market may find the going tough. While it could mean less work for artisans, it could also lead to domestic jewellers recycling old ornaments, leading to a negative impact on their finances. However, the same may not apply to large players.
RBI’s recent directive has asked banks not to convert gold purchases done through credit cards into equated monthly instalments (EMIs). It has also mandated that cards should not be accepted for purchase of gold coins at branches.
In order to attract the customers, many banks offer EMI facility on purchase of air tickets, mobile phones and gold jewellery on credit cards.
Along with the option of converting the payment dues into EMIs, some banks also have tie-ups with merchant establishments for offering more facilities like full or partial waiver of processing fees and interest.
Moreover, the central bank has asked banks not to push gold coin sales aggressively; the finance ministry wants public-sector banks to completely stop such sales. The state-run banks have already implemented it.
According to a media report, bankers said RBI had held discussions on EMIs offered on outstanding credit card bills for all kinds of purchases and would soon come out with specific guidelines on this. Banks might have to make more disclosures. It was still at the discussion stage, said a senior banker.
Earlier, RBI had also asked banks not to lend against gold coins weighing over 50 g.
Recently, there was an increase in import duty on gold in order to lower the demand for the yellow metal so that its import can be brought down.
Earlier, on May 13, RBI had restricted gold imports on consignment basis by banks. (KNN)
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