RBI relaxes norms for loans against gold ornaments
Updated: Jul 23, 2014 03:31:17pm
Mumbai, Jul 23 (KNN) The Reserve Bank of India has relaxed the Rs one lakh limit on the amount of non-agriculture loan sanctioned by banks at any point of time against the 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.
RBI had received representations from banks requesting an increase in the prescribed ceiling and to review other conditions applicable to such loans.
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.
The RBI said the tenor of the loan against gold ornaments and jewellery for non-agricultural end-uses, where both interest and principal are due for payment at maturity of the loan, cannot exceed 12 months from the date of sanction. (KNN/SD)
"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.
RBI had received representations from banks requesting an increase in the prescribed ceiling and to review other conditions applicable to such loans.
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.
The RBI said the tenor of the loan against gold ornaments and jewellery for non-agricultural end-uses, where both interest and principal are due for payment at maturity of the loan, cannot exceed 12 months from the date of sanction. (KNN/SD)
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