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E-mail ID will not be published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.

EDITORIAL OF THE DAY

  • Bureaucrats have enjoyed flying miles at taxpayer expense for too long

    The beleaguered Indian taxpayer will certainly applaud prime minister Narendra Modi’s attempt to deliver on his promise of cutting down fiscal defic

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>: CHAIN REACTION

A domino effect is the cumulative effect produced when one ...

Zehra Naqvi

Rememberance and forgetting are crucial

Memories are so vital to our lives that they can ...

Dharmendra Khandal

Sandalwood may get extinct if not protected

When we talk of sandalwood, the most common usage that ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture