RBI/2011-12/411
A.P. (DIR Series) Circular No. 83
February 27, 2012
To
All Category – I Authorised Dealer Banks
Madam / Sir,
Import of Gold on Loan Basis- Tenor of Loan and
Opening of Stand - By Letter of Credit
Attention of Authorised Dealer Category – I (AD Category – I)
banks is invited to the
A.P.(DIR Series) Circular No. 34 dated February 18, 2005,
in terms of which the maximum tenor of gold loan was notified as 240 days
consisting of 60 days for manufacture and exports +180 days for fixing the price
and repayment of gold loan as per the Foreign Trade Policy 2004-2009 of the
Government of India and that the tenor of the Standby Letter of Credit (SBLC),
for import of gold on loan basis, where ever required, should be in line with
the aforesaid tenor of gold loan.
2. Attention of the AD Category –I banks is also invited to
para 4A 23.2 and para 4A 23.3 of the Hand Book of Procedures (HBP) Vol. I of the
Foreign Trade Policy (FTP) 2009-14 which states that, "the export has to be
completed within a maximum period of 90 days from the date of release of gold on
loan basis ", and that, " the exporter shall have flexibility to fix the price
and repay gold loan within 180 days from date of export". Accordingly, the
maximum tenor of gold loan becomes 270 days at present (i.e. 90 days for
manufacture and export + 180 days for fixing the price and repayment) as per
FTP 2009-14.
3. AD Category-I Banks may, accordingly, note to comply that
(i) the maximum period of gold loan shall be as per the Foreign Trade Policy
2009-14 or as notified by the Government of India from time to time, in this
regard and (ii) the tenor of SBLC, for import of gold on loan basis, where ever
required, should also be in line with the tenor of gold loan.
4. All the other terms and conditions of the A.P. (DIR Series) circular No.
34 dated February 18, 2005 shall remain unchanged.
5. AD Category – I banks may bring the contents of this
circular to the notice of their constituents and customers concerned.
6. The directions contained in this circular have been issued
under Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act
(FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals,
if any, required under any other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager