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.

EDITORIAL OF THE DAY

  • One is not sure how much Sinha will be remembered for protecting investor interest

    In his exit interview, Sebi chairman UK Sinha has stated that the regulator has been justly “harsh” with those threatening the integrity of the ca

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

Disequilibrium: Pawn to king four

Sir Conrad Corfield, heavy hitter of the British Political Department ...

Susan Visvanathan

The problem called JNU

Reservation is a word that some administrators and intellectuals find ...

Rajgopal Nidamboor

Stay in harmony with nature

It’s a fact of contemporary life that you ...