The Reserve Bank of India (RBI) introduced the draft of the new rules of Gold Loan on 9 April. There has been a lot of discussion about this draft in the financial sector. Especially bankers have reacted a lot to this. They believe that this rule can cause problems to those who suddenly take a loan to meet the need for money and take a loan. On the other hand, behind the introduction of new rules, the objective of RBI is to protect the interests of people taking gold loans. For this, the Central Bank wants equality in the rules of Gold Loan of Commercial Bank, Co-operative Bank and NBFC.
People can be forced to go to the usurer
Millions of people with low income or less money gold every year (Gold Loan) Take loans. Bankers believe that by tightening the rules of gold loan, people taking gold loan will again be forced to take loans from people like usurers at higher interest. Behind introducing new guidelines Rbi The purpose of is correct. However, it will have a poor impact on the gold loan market. This has been an easy medium for customers to meet the need for loans.
The rule of verifying gold ownership will cause problems
A provision in the proposed new rules is that the gold loan bank or NBFC will have to verify the gold ownership of the mortgage. If a person who mortgaged gold, if he cannot present a receipt to buy gold, then he has to present another proof that the gold he is mortgaged is his. Bankers say that this rule will make it difficult for customers especially people living in the village to take gold loan.
Customers will get gold loan of low amount
Questions have been raised on the definition of loan-to-valeu (LTV) ratio for a loan with bullet repayments. Loans with bullet repayments mean a gold loan in which the payment of principal and interest is done when the period of the loan is completed. Due to the new rules, customers will get a low amount loan. This will cause problems for those who meet their needs by meeting the needs of farming or by taking gold loan in the event of emergency. In the new RBI rules, a 12 -month loan period has been set for a maximum loan for consumption loan. The limit of 75 percent LTV is kept.
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People with less money make it easier with gold loan
The new rules will reduce the risk for banking systems, but those people will have to face problems, whose RBI is presenting new rules to protect the interests. Gold loan is an easy source of money for those who are difficult to raise money from other sources. Larh families with low income, small farmers and small entrepreneurs take gold loans by mortgaging the jewelery kept in the house near the banks.