RBI allows regional rural banks to grant gold loans up to Rs2 lakh
Mumbai: The Reserve Bank of India (RBI) on Thursday said that regional rural banks (RRBs) can grant gold loans up to Rs2 lakh with bullet repayment option against the current limit of Rs1 lakh.
Under bullet repayment schedule, loan amount is paid at the end of maturity.
The loans with a bullet repayment will have a maximum maturity of 12 months and the loan-to-value ratio should be 75% of the gold pledged.
“Crop loans sanctioned against the collateral security of gold or gold ornaments shall continue to be governed by the extant income recognition, asset classification and provisioning norms for such loans,” the notification said.