Import of gold on loan basis for export - RBI issues instructions
As per para 4.77.2 and 4.77.3 of the FTP, gold can be imported on loan basis and the export has to be completed within 60 days and the loan repaid within 60 days from the date of export. The DGFT had by PN No. 28/1.2.2004 extended the time to repay the loan to 180 days from the date of export. In view of this RBI has issued the following instructions to Banks:-
(i) Nominated agencies / approved banks can import gold on loan basis for on lending to exporters of jewellery under this scheme. On the other hand EOUs and units in SEZ who are in the Gem and Jewellery sector can import gold on loan basis for manufacturing and export of jewellery on their own account only.
(ii) The maximum tenor of gold loan would be 240 days;
(iii) ADs may open Standby Letters of Credit (SBLC), for import of gold on loan basis, where ever required;
(iv) ADs must maintain adequate documentation with them to uniquely link all imports with the SBLC issued for the import of gold on loan basis.
A.P. (DIR Series) CIRCULAR NO. 34, Dated : February 18 , 2005