MANU/RMIC/0009/2020
Ministry : Reserve Bank of India
Department/Board : Department of Regulation
Circular No. : DOR.NBFC(PD).CC.No.108/03.10.001/2019-2020
RBI/2019-2020/148
Date : 21.01.2020
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,
(Manoranjan Mishra)
Chief General Manager