RBI Governor Shaktikanta Das doubles gold loan limit for these banks. Check details here
RBI Governor announces increase in gold loan limit to ₹4 lakh in certain urban co-operative banks
The Reserve Bank of India (RBI) has hiked the existing limit of gold loans under the bullet repayment scheme. It has been hiked from ₹2 lakh to ₹4 lakh in certain urban co-operative banks. The announcements were made by RBI Governor ShaktiKanta Das on Friday while announcing the outcomes of the policy meeting.
“It has been decided to increase the existing limit for Gold Loans under the Bullet Repayment scheme from ₹2 lakh to ₹4 lakh in respect of Urban Co-operative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023,” said Das
This measure is in pursuance of our earlier announcement that suitable incentives shall be provided to UCBs that have met the prescribed PSL targets as of March 31, 2023, Das added.
"We welcome RBI's progressive move with the Gold Loan Bullet product. This progressive step of increasing the limit for gold loans bullet product from ₹2 lakh to ₹4 lakh in respect of urban cooperative banks will prove to be beneficial for customers in not only easing financial strain but also enabling them to benefit from formal lending sources," said Anuj Arora, Co-Founder & COO SahiBandhu, a leading Gold Loan aggregator platform.
Gold loan limit under bullet payment scheme
Under the bullet repayment scheme, the banks need to maintain a loan-to-value ratio of 75 per cent on the loan amount including the interest.
The interest will be charged to the account on a monthly basis but will become due for payment along with the principal only at the end of 12 months from the date of sanction, the central bank had said in a circular in 2017.
The period of the loan shall not exceed 12 months from the date of sanction.
State and central cooperative banks grant loans for various purposes against the security of gold/gold ornaments as part of their lending policy.
RBI maintains the status quo in policy rate
RBI MPC in its October review meeting unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, thus maintaining the status quo for the fourth straight occasion.
While deliberating the policy statement Friday morning, RBI Governor Shaktikanta Das said the central bank is concerned and it has identified high inflation as a major risk to macro-economic stability and sustainable growth.
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Business NewsIndustryBankingRBI Governor Shaktikanta Das doubles gold loan limit for these banks. Check details here
First Published:6 Oct 2023, 11:29 AM IST
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