RBI relaxes norms for loans against gold ornaments

Tags: News
The Reserve Bank today relaxed the limit of loan that banks can sanction against the pledging of gold ornaments and jewellery.

On December 30, banks had restricted the loans of up to Rs 1 lakh against pledge of gold ornaments and jewellery.

"Banks, as per their Board approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses," RBI said in a notification.

The apex bank said it has received representations from banks requesting to increase the prescribed ceiling and to review other conditions applicable for loans against pledge of gold ornaments and jewellery, where both interest and principal are payable at maturity.

The period of such loan should not exceed 12 months from the date of sanction, RBI said.

The Loan to Value (LTV) shall be maintained at 75 per cent throughout the tenure of the loan, which means that the borrower will get loan only to the extent of 75 per cent of the value of gold pledged.

Interest will be charged to the account on monthly basis and may be recognised on accrual basis provided the account is classified as 'standard' account, RBI said, adding that the norm would also apply to existing loans.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • The govt needs to spend its cash without being frugal or wasteful

    Increased government spending can provide a temporary stimulus to demand and output. This is Economics 101.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Roopen Roy

Livability as a competitive advantage

Some CEOs and policymakers argue forcefully that distance is of ...

Rajgopal Nidamboor

The submarine element of your mind

We are all aware of the power of our will ...

Gautam Gupta

Retailers have it tough, thanks to e-commerce

For the past few months our focus has been on ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture