NBFCs cannot issue more than Rs20,000 in cash against gold loans: RBI
The Reserve Bank of India said currently the relevant threshold under the Income Tax Act, 1961 is Rs20,000
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Mumbai: The Reserve Bank of India (RBI) on Thursday said non-banking finance companies (NBFCs) cannot issue more than Rs20,000 in cash against gold loans.
“Currently, the relevant threshold under the Income Tax Act, 1961 is Rs20,000,” the notification said.
Earlier, gold loans above Rs1 lakh were made mandatory to be disbursed though cheques.
India’s leading gold loan companies Manappuram Finance Ltd and Muthoot Finance had assets under management (AUMs) worth Rs123 billion and Rs269 billion, respectively, at the end of December quarter.