RBI allows banks to lend up to 90% against gold; Muthoot, Manappuram corrected
The RBI hiked the loan-to-value ratio on gold loans to provide relief to borrowers looking to take gold loans to mitigate the urgent financial needs caused by the Covid-19 pandemic.
Loans sanctioned by banks against pledge of gold ornaments and jewellery for non-agricultural purposes should not exceed 75 per cent of the value of gold ornaments and jewellery,” RBI said.
It further added that with a view to further mitigate the economic impact of the Covid-19 pandemic on households, entrepreneurs and small businesses, it has been decided to increase the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent. This relaxation shall be available till March 31, 2021.