Valuation method of Gold declared by RBI for Lending against Gold

RBI/2014–15/605 DNBR.CC.PD.No.036/03.10.01/2014–15

May 21, 2015

Lend­ing against secu­ri­ty of sin­gle prod­uct — Gold Jewellery

Please refer to the cir­cu­lars DNBS.CC.PD.No.356/03.10.01/2013–14 dat­ed Sep­tem­ber 16, 2013 and DNBS.CC.PD.No.365/03.10.01/2013–14 dat­ed Jan­u­ary 08, 2014 on the cap­tioned subject.

2. The Bank has pre­scribed that the val­u­a­tion of gold jew­ellery for arriv­ing at the Loan-To-Val­ue (LTV) shall be done at the aver­age of the clos­ing price of 22 carat gold for the pre­ced­ing 30 days as quot­ed by the Bom­bay Bul­lion Asso­ci­a­tion Ltd. (BBA).

3. On a review, it has been decid­ed that NBFCs may also use the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Commission.

4. Noti­fi­ca­tions of date amend­ing the Non-Bank­ing Finan­cial (Deposit Accept­ing or Hold­ing) Com­pa­nies Pru­den­tial Norms (Reserve Bank) Direc­tions, 2007, Non-Sys­tem­i­cal­ly Impor­tant Non-Bank­ing finan­cial (Non-Deposit Accept­ing or Hold­ing) Com­pa­nies Pru­den­tial Norms (Reserve Bank) Direc­tions, 2015 and Sys­tem­i­cal­ly Impor­tant Non-Bank­ing finan­cial (Non-Deposit Accept­ing or Hold­ing) Com­pa­nies Pru­den­tial Norms (Reserve Bank) Direc­tions, 2015 are enclosed.

Yours faith­ful­ly,

(C. D. Srinivasan)
Chief Gen­er­al Manager

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RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING REGULATION
CENTRAL OFFICE, CENTRE I, WORLD TRADE CENTRE
CUFFE PARADE, COLABA, MUMBAI 400 005

Noti­fi­ca­tion No. DNBR. 024/CGM (CDS) — 2015 dat­ed May 21, 2015

The Reserve Bank of India (the Bank), hav­ing con­sid­ered it nec­es­sary in pub­lic inter­est and being sat­is­fied that, for the pur­pose of enabling the Bank to reg­u­late the cred­it sys­tem to the advan­tage of the coun­try, it is nec­es­sary to amend the Non-Bank­ing Finan­cial (Deposit Accept­ing or Hold­ing) Com­pa­nies Pru­den­tial Norms (Reserve Bank) Direc­tions, 2007 (Noti­fi­ca­tion No.DNBS.192/DG(VL)-2007 dat­ed Feb­ru­ary 22, 2007) (here­inafter referred to as ‘the Direc­tions’), in exer­cise of the pow­ers con­ferred by sec­tion 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the pow­ers enabling it in this behalf, here­by directs that the Direc­tions shall be amend­ed with imme­di­ate effect as follows –

1. The fol­low­ing words may be added at the end of the para­graph 17C (1) (i) of the Directions:

“or the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Commission.”

2. The para­graph 17C (2) (b) of the Direc­tions be replaced as follows:

(b) While auc­tion­ing the gold, the NBFC should declare a reserve price for the pledged orna­ments. The reserve price for the pledged orna­ments should not be less than 85 per cent of the pre­vi­ous 30 day aver­age clos­ing price of 22 carat gold as declared by the Bom­bay Bul­lion Asso­ci­a­tion Ltd. (BBA) or the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Com­mis­sion and val­ue of the jew­ellery of low­er puri­ty in terms of carats should be pro­por­tion­ate­ly reduced.

(C.D. Srini­vasan)
Chief Gen­er­al Manager

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RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING REGULATION
CENTRAL OFFICE, CENTRE I, WORLD TRADE CENTRE
CUFFE PARADE, COLABA, MUMBAI 400 005

Noti­fi­ca­tion No.DNBR.025/ CGM (CDS) ‑2015 dat­ed May 21, 2015

The Reserve Bank of India ( the Bank), hav­ing con­sid­ered it nec­es­sary in pub­lic inter­est and being sat­is­fied that, for the pur­pose of enabling the Bank to reg­u­late the cred­it sys­tem to the advan­tage of the coun­try, it is nec­es­sary to amend the Sys­tem­i­cal­ly Impor­tant Non-Bank­ing Finan­cial (Non-Deposit Accept­ing or Hold­ing) Com­pa­nies Pru­den­tial Norms (Reserve Bank) Direc­tions, 2015 (Noti­fi­ca­tion No.DNBR.009/CGM(CDS)- 2015 dat­ed March 27, 2015) (here­inafter referred to as ‘ the Direc­tions’), in exer­cise of the pow­ers con­ferred by sec­tion 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the pow­ers enabling it in this behalf, here­by directs that the Direc­tions shall be amend­ed with imme­di­ate effect as follows-

1. The fol­low­ing words may be added at the end of the para­graph 20(1) (i) of the Directions:

“or the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Commission.”

2. The para­graph 20(2) (b) of the Direc­tions be replaced as follows:

(b) While auc­tion­ing the gold the NBFC should declare a reserve price for the pledged orna­ments. The reserve price for the pledged orna­ments should not be less than 85 per cent of the pre­vi­ous 30 day aver­age clos­ing price of 22 carat gold as declared by the Bom­bay Bul­lion Asso­ci­a­tion Ltd. (BBA) or the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Com­mis­sion and val­ue of the jew­ellery of low­er puri­ty in terms of carats should be pro­por­tion­ate­ly reduced.

(C.D. Srini­vasan)
Chief Gen­er­al Manager

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RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING REGULATION
CENTRAL OFFICE, CENTRE I, WORLD TRADE CENTRE
CUFFE PARADE, COLABA, MUMBAI 400 005

Noti­fi­ca­tion No.DNBR.026/ CGM (CDS) ‑2015 dat­ed May 21, 2015

The Reserve Bank of India (the Bank), hav­ing con­sid­ered it nec­es­sary in pub­lic inter­est and being sat­is­fied that, for the pur­pose of enabling the Bank to reg­u­late the cred­it sys­tem to the advan­tage of the coun­try, it is nec­es­sary to amend the Non-Sys­tem­i­cal­ly Impor­tant Non-Bank­ing Finan­cial (Non-Deposit Accept­ing or Hold­ing) Com­pa­nies Pru­den­tial Norms (Reserve Bank) Direc­tions, 2015 (Noti­fi­ca­tion No.DNBR.008/ CGM(CDS) — 2015 dat­ed March 27, 2015) (here­inafter referred to as ‘the Direc­tions’), in exer­cise of the pow­ers con­ferred by sec­tion 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the pow­ers enabling it in this behalf, here­by directs that the Direc­tions shall be amend­ed with imme­di­ate effect as follows-

1. The fol­low­ing words may be added at the end of the para­graph 21(1) (i) of the Directions:

“or the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Commission.”

2. The para­graph 21(2) (b) of the Direc­tions be replaced as follows:

(b) While auc­tion­ing the gold, the NBFC should declare a reserve price for the pledged orna­ments. The reserve price for the pledged orna­ments should not be less than 85 per cent of the pre­vi­ous 30 day aver­age clos­ing price of 22 carat gold as declared by the Bom­bay Bul­lion Asso­ci­a­tion Ltd. (BBA) or the his­tor­i­cal spot gold price data pub­licly dis­sem­i­nat­ed by a com­mod­i­ty exchange reg­u­lat­ed by the For­ward Mar­kets Com­mis­sion and val­ue of the jew­ellery of low­er puri­ty in terms of carats should be pro­por­tion­ate­ly reduced.

(C.D. Srini­vasan)
Chief Gen­er­al Manager