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Wednesday, 7th September 2005 (4737 views)

Domestic jewellery manufacturers in India will now be allowed to take out gold loans.

The gold loans were previously only available to jewellery exporters but their scope is to be widened to manufacturers as well.

Nevertheless, unlike their exporting counterparts, the manufacturers must be within the 25 per cent ceiling imposed on aggregate borrowing for non-export purposes, reports the Financial Express.

Under the new measures, jewellery manufacturers will repay the loan at a fixed rate equal to the international gold rate.

To qualify for a loan, manufacturers must present one of the nominated banks with a letter of credit or a bank guarantee from their current bank.

A total of 14 banks have been nominated including the Bank of India, Canara Bank, ICICI Bank and the Union Bank of India.

 

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