Banks seek policy, guidelines for silver loans from RBI

New Delhi, June 16 (KNN) The Reserve Bank of India (RBI) has been reached out by banks to provide a policy framework for silver metal loans on the lines of the existing gold metal loans for borrowers.

In the last one year, silver exports have gone up around 16 per cent.

The growth in silver exports in the last one year, jewellery manufacturers in India have been asking banks to extend credit for the procurement of silver, silver articles, and jewellery manufacturing, reported ET.

The silver exports had touched around Rs 25,000 crore and there was a huge demand for credit from this sector.

Silver is a precious metal that has the most usage in the industrial sector and hence it gets affected by trends in both gold and industrial metals.

Under existing RBI rules for gold, nominated banks are authorised to import gold. The designated banks, who are a part of the Gold Monetisation Scheme, 2015, can extend gold (metal) loans (GML) to jewellery exporters or domestic manufacturers of gold jewellery.

Herein, the loans are repaid in rupees, which is equivalent to the value of the gold borrowed. Banks can provide the borrower with the option to repay a part of the loan in the form of physical gold in lots of one kg or more.  (KNN Bureau)