New Rules for Gold Loans: If you have ever taken a loan by pledging gold when you needed money or are thinking of taking one, then this news is useful for you. RBI is now going to bring new rules regarding gold loan.
The purpose of these guidelines is to make the gold loan system more transparent and secure.
There will be a big change in the rules of gold loan
RBI has said that new rules will soon be issued for banks and NBFCs (non-banking financial companies) giving gold loans. Their aim is to ensure that there is no irregularity in the loans given on gold jewellery. The special thing is that these rules will be in the interest of the loan takers and will increase the responsibility of the loan giving companies.
Why are new guidelines necessary?
RBI recently found that some companies were lax in the rules for giving gold loans. The report said that there were many flaws in the loan giving process like not setting the correct value of gold, not using the loan amount properly and negligence in outsourcing. In view of this, RBI is now going to bring strict and uniform guidelines.
Opinion sought on draft guidelines
RBI has released a draft in this regard on which suggestions have been sought from the public. That means final guidelines will be made in the coming days, which banks and NBFCs will have to follow.
Impact on the market, shares of many companies fell
This announcement of RBI had a direct impact on the stock market. Shares of companies like Muthoot Finance, Manappuram Finance and IIFL Finance fell by up to 7%. The reason for this is that a large part of the income of these companies comes from gold loans and the new rules can be strict for them.
Huge jump in demand for gold loan
According to the RBI report, the demand for gold loans is increasing rapidly across the country. As of March 2024, about 60% of the gold loans given were from NBFCs alone. This shows that even today many people use their gold first when they need money.
With the new rules, RBI wants to ensure that the gold loan system is not only profitable but also reliable. Also, the loan giving institutions should also carry out their process more professionally and responsibly.
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