Fin Cos to give 75% loan on pledged gold

Fin Cos to give 75% loan on pledged gold

RBI has allowed Finance companies to provide 75% loan on pledged gold as against 60% earlier to facilitate monetization of idle gold.

Only intrinsic value of the gold to be used to determine the loan value

NBFCs will have to certify on purity of gold, which will be used to determine the maximum permissible loan and the reserve price for auction

Mandatory ownership verification to be done in cases where the gold jewellery pledged is more than 20g, through a suitable document explaining how the ownership was determined

Firms have to conduct auction in the same town or taluk, in which the branch that had extended the loan is located

Disbursement of loans of Rs 1 lakh and above must be done through cheques