Gold loan There is good news for customers going to pick up. Soon you will be able to get a loan of 85 percent of your gold value. Right now only a loan of 75 percent amount is available. RBI Governor Sanjay Malhotra said on Friday that the central bank is preparing to increase the loan-price (LTV) ratio from the current 75 per cent to 85 per cent to give loans in lieu of gold. Talking to reporters at the central bank headquarters, Malhotra said that this exemption will be given with certain conditions. Both principal and interest will be included when calculating LTV, while currently emphasis is laid only on the principal.
Debt-price ratio will increase by 85 percent
He said, “So far the debt-price ratio was 75 percent. We are increasing it by 85 percent for small loans below Rs 2.5 lakhs. ”He said that it will be included in the regulation related to gold loan. Work has been going on for some time. Malhotra said that the aim of the revised criteria is to better regulate this category with minimal risk. The RBI Governor said that public sector financial institutions are incorporating both interest and principal when giving gold loans under the current LTV limit of 75 percent, but some non-banking financial companies and LTVs are being increased by 88 percent in small banks.
The draft was released earlier
A few months ago, RBI issued a draft on the gold loan. At that time Malhotra made it clear that the draft is a step to bring all the rules issued earlier to one place. The governor said that the final regulation would be issued after assessing the impact of public consultation and steps on it. Malhotra said that among other aspects, new gold loan rules will also provide clarity on ownership. This will include self-declaration facilities. If the borrowers are unable to submit a receipt for the procurement of gold, they will be able to do self-declaration. He said that this gold will end the requirement of ‘credit’ assessment for loans up to Rs 2.5 lakh in case of mortgage being pledged. The governor said that the final-use monitoring of the loan will be mandatory only when a financial institution is taking advantage of a loan by classifying a loan of priority sector. Malhotra said that if a financial institution has securities other than gold, the debt-price ratio may exceed the prescribed limit as per credit assessment.
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