Reserve Bank of India
RBI/2019-20/148
DOR.NBFC (PD).CC.No.108/03.10.001/2019-20
January 21, 2020
All Non-Banking Financial Companies (excluding Primary Dealers)
Madam/ Sir,
Lending against security of single product – Gold jewellery
Please refer to paragraph 27 of Master Direction – Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016; and paragraph 27 of Master Direction – Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016.
2. On a review, it has been decided that NBFCs can pool gold jewellery from different branches in a district and auction it at any location within the district, subject to meeting the following conditions:
a) The first auction has failed.
b) The NBFC shall ensure that all other requirements of the extant directions regarding auction (prior notice, reserve price, arms-length relationship, disclosures, etc.) are met.
3. Non-adherence to the above conditions will attract strict enforcement action. The aforementioned Master Directions are being modified accordingly.
Yours faithfully,
-sd-
(Manoranjan Mishra)
Chief General Manager
