Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

April 2012

A.P. (DIR Series) Circular No. 83, dated 27-2-2012 — Import of gold on loan basis — Tenor of loan and opening of stand-by letter of credit.

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
fiogf49gjkf0d
Presently, the maximum tenor of gold loan, as per the Foreign Trade Policy 2004-2009 of the Government of India, is 240 days — 60 days for manufacture and exports +180 days for fixing the price and repayment of gold loan.
The Foreign Trade Policy 2009-2014 of the Government of India has increased the period of completion for export from 60 days to 90 days. As a result, the maximum tenor of gold loan is increased from 240 days to 270 days — 90 days for manufacture and exports +180 days for fixing the price and repayment of gold loan.

Further, this Circular requires banks to see that:

(i) Maximum period of gold loan must be as per the Foreign Trade Policy 2009-14 or as notified by the Government of India from time to time.

(ii) Tenor of stand-by letter of credit, for import of gold on loan basis, wherever required, must also be in line with the tenor of gold loan.

Download PDF

You May Also Like

A.P. (DIR Series) Circular No. 82, dated 21- 2-2012 — Release of foreign exchange for imports — Further liberalisation.

A.P. (DIR Series) Circular No. 85, dated 29- 2-2012 — External Commercial Borrowings (ECB) for Infrastructure facilities within National Manufacturing Investment Zone (NMIZ).