JOIN USThe Reserve Bank on Tuesday relaxed the limit on loans that banks can sanction against pledging of gold ornaments and jewellery.
On December 30, banks had restricted loans of up to Rs 1 lakh against pledge of gold ornaments and jewellery.
"Banks, as per their board approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses," RBI said in a notification.
The apex bank said it has received representations from banks requesting to increase the prescribed ceiling and to review other conditions applicable for loans against pledge of gold ornaments and jewellery, where both interest and principal are payable at maturity.
The period of such loan should not exceed 12 months from the date of sanction, RBI said. The Loan to Value shall be maintained at 75 per cent through the tenure of the loan.