RBI’s New Rule on Gold Loan: RBI changed the rule, now only 75% will get loan on gold

News India Live, Digital Desk: Have you ever suddenly needed money and have you thought of taking cash quickly by pledging your gold? Millions of people in India Gold Loan for Emergency or Small Business (Gold Loan) Depend on. But now, the Reserve Bank of India (RBI) has made a major change in the rules of the gold loan, which is about to affect your pocket.

What has changed and what does it mean?

RBI has tightened the rules of gold loan for non-banking financial companies (NBFCs), such as Muthoot Finance or Manappuram Finance. So far, these companies are of your gold value 90% Could give loans till But under the new rule, now they maximum 75% Will be able to give loan only.

Let us understand it from an example:

• First: If the value of your gold was ₹ 1,00,000, then you could get a loan of up to ₹ 90,000.

• Now: On the same ₹ 1,00,000 gold, you will get only a loan of up to ₹ 75,000.

This simply means that if you need the amount you need before, then you will have to pledge more gold now.

Why did RBI do this?

The RBI has made this change in view of the rapid increase in gold loans and possible risks in it. The RBI wants the financial system to remain stable and any kind of betting or risky activities can be curbed. When gold prices change very rapidly, having more LTV (loan-to-value) increases the risk for both banks and NBFCs. NBFCs will have to be more careful by this rule.

Who will affect this?

This rule will mainly affect those who take gold loans from NBFCs for their immediate needs. Small traders, farmers and people who need cash immediately, they often resort to gold loans. Now they will get less money than before or they will have to pledge more gold.

Will banks also affect?

No. Public and private banks have already been giving loans up to 75% of the value of gold, so this new rule will not have any direct impact on them. This change is particularly focused on NBFCs, so that their risk can be reduced.

What to do for you

If you are planning to take a gold loan, keep these new rules in mind.

• You can get less money now, so plan in advance according to your needs.

• Compare different lenders (eg bank and NBFCs) interest rates and rules.

• If needed, if you have an option, taking a gold loan from a bank can be beneficial for you as their interest rates are usually lower than NBFCs.

This is a remote step of RBI, which aims to strengthen the financial system, even if its immediate effect may cause some inconvenience to some borrowers.

Additional Charge: Amazon started a fee of ₹ 5, now extra money will have to be paid on every order