The Reserve Bank of India has issued amendments to the Gold Metal Loan (GML) Scheme, updating the framework for banks, jewellers and entities linked to the Gold Monetisation Scheme (GMS). The revised Directions, effective from 1 April 2026 or earlier if adopted, aim to widen access while tightening oversight and risk controls.
Under the updated rules, nominated banks may now extend import-linked GML to jewellers, while GMS-linked GML will be available to both jewellers and MMTC for the minting of India Gold Coins. Banks have been directed to set internal lending and risk policies for GML, including per-borrower exposure caps.
Daily valuation has been mandated, with all GML to be marked to INR using the LBMA Gold AM price and the RBI’s USD reference rate. Borrowers will not carry any liability towards the gold consignor or GMS depositors.
Monitoring norms have been tightened, requiring banks to track end-use, with primary gold obtained through GML barred from being sold or exported.
Banks may lend to non-customers backed by a stand-by letter of credit or bank guarantee from other banks, subject to an independent credit assessment. Interest rates under the revised framework will be linked to gold procurement and holding costs, with spreads added by banks.
The tenor for exporters will follow the Foreign Trade Policy, while other borrowers will face a cap of 270 days. Repayments must be made in INR based on prevailing gold value, though GMS-linked loans may allow physical gold repayment.
Physical repayment must adhere to the India Good Delivery Standard or LBMA Good Delivery Standards, with gold supplied directly by refiners or designated agencies.
Banks will be required to submit quarterly GML reports to the RBI under the amended framework.
