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RBI allows NBFCs to lend more against gold jewellery

Mumbai: People seeking loan against gold jewellery can now borrow more, as the Reserve Bank today allowed NBFCs to lend up to 75 per cent of the value of metal from 60 per cent at
India TV News Desk January 08, 2014 22:59 IST
India TV News Desk
Mumbai: People seeking loan against gold jewellery can now borrow more, as the Reserve Bank today allowed NBFCs to lend up to 75 per cent of the value of metal from 60 per cent at present.

“...it has been decided to raise the LTV ( Loan-To-Value) ratio to up to 75 per cent for loans against the collateral of gold jewellery from the present limit of 60 per cent with immediate effect,” the RBI said.

This, it said, has been done in view of the moderation in the growth of gold loan portfolios of Non-Banking Financial Companies (NBFCs) in the recent past.

The RBI further said the value of the jewellery for the purpose of determining the maximum permissible loan amount will be only the intrinsic value of the gold content therein and no other cost elements (like making charges) should be added thereto.