Finance Ministry Seeks Gold Loan Data From Banks, Hinting at Policy Moves

The finance ministry has directed banks engaged in bullion imports to submit detailed information on gold metal loans (GMLs) and loans backed by gold from 2023 onwards, in what could indicate upcoming policy measures on gold.

Despite a lower import volume of 721 tonnes compared with the previous year, India’s gold import bill surged 24% to a record $71.9 billion in 2025-26.

The banks either borrow gold from international lenders and lend it to jewellers through GMLs, or procure gold under consignment arrangements, making payments based on confirmed domestic demand from wholesale buyers.

According to a report by The Times of India, the Department of Financial Services sent a communication to banks on Friday requesting data on loan values and volumes, customer counts, international suppliers, portfolio sizes, collateral amounts, and borrower numbers.

Banks were asked to submit the information by Monday, with some providing month-wise figures.

Following the restoration of gold import duty to 15% and restrictions on silver imports, further measures may be announced soon. June and July are typically slow months for gold demand, making this period suitable for reviewing policy options.

The Reserve Bank of India had recently asked banks to estimate their GML exposure for the current year.

Introduced in 1998 for exporters and later extended to jewellers, GMLs are strictly monitored. Industry participants have suggested measures to moderate imports without affecting supply.

A bullion trade body proposed that banks use gold refined from dore instead of importing fresh gold for GMLs. Dore, or unrefined gold, is processed domestically before being supplied to jewellers. Gold ETFs could also purchase dore-refined bars to reduce import dependence.

Recently, four mutual fund houses restricted subscriptions to gold-linked schemes. During a recent RBI meeting, industry representatives also discussed permitting gold exports under specific conditions.