According to reports, The Reserve Bank of India (RBI) has issued strict circular for 19 banks authorised to import gold to terminate all tie-up arrangements for retailing of gold or gold coins with non-nominated banks, co-operative banks and non-banking financial companies.

The Reserve Bank of India in the past had authorised banks such as the State Bank of India, ICICI Bank, HDFC Bank, UTI Bank, Union Bank of India among others to import gold for sale to jewellery manufacturers, exporters and domestic users.

Lately it was observed that select commercial banks had tied up with co-operative banks to boost the volumes of their gold retailing business and promote the product in rural centres.

Therefore, the banking regulator has asked banks to call off such arrangements with immediate effect.