Page 37 - Bullion World Volume 4 Issue 9 September 2024

Bullion World | Volume 4 | Issue 9 | September 2024

repay the gold loan in Indian Rupees. The final price Repayment of GML : –
would include the applicable premiums, customs ¾ Repayment of the loan can be done by borrower by
duty, GST. paying the outstanding Gold Metal Loan on Cash,
¾ On the repayment of Gold metal loan, the borrower Tom or Spot basis.
can utilise the available gold loan limits for further ¾ Borrower can also avail Gold Forward and currency
drawdowns against the existing collateral ( In case forward to fix the price of Gold Metal Loan. The gold
of SBLC/BG Restoration letter required from issuing forward/ currency forward would have the same due
bank ). date as the GML. The forwards would be utilised to
¾ Interest on gold loans is recovered on a monthly liquidate Gold Loan contract.
basis and is calculated till the last day of the month, ¾ Borrower shall fund the current/ cash credit account
from the borrower’s bullion account. The interest is maintained with the bank sufficiently for repayment
accrued In gold ounces and later debited on the first on or before the date of maturity
working day of the following month in INR using the
month end London AM Fix and FIBIL rate.

What Next ? For the Betterment of achieving success of Gold Metal Loan Facility
¾ On June 23, 2021 Reserve Bank of India issued a circular ( RBI/2021-22/58 DOR.CRE(DIR).
REC.24/23.67.001/2021-22) for GML repayments Banks shall provide an option to the borrower to repay a part
of the GML in physical Gold But till now no Banks has enabled this option.
¾ Sanction GML limits in terms of the weight of Gold.

Federal Bank has been nominated by the RBI for importing Gold/Silver. Currently Federal Bank offer Gold Metal Loan
to domestic gold jewellery manufacturers under which a jewellery manufacturer borrows gold metal instead of rupees
and settles the GML with the sale proceeds.
Federal bank is providing GML facility to the many renowned jewellers of Pan India based, and one of the most
preferred Bank among jewellers fraternity for Availing Gold Metal Loan Facility.

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