Now, you can borrow more against gold

The Reserve Bank of India has added additional shine to gold ornaments and jewellery by allowing banks to give loans up to 90 per cent of the value of such items pledged by borrowers.

Mumbai: The Reserve Bank of India on Thursday raised the permissible loan to value (LTV) ratio for gold loans for non-agricultural purposes to 90 per cent from 75 per cent.

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 for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent, RBI said in its Statement on Developmental and Regulatory Policies.

The said relaxation shall be available till March 31, 2021, the central bank said.

Accordingly, fresh gold loans sanctioned on and after April 1, 2021 shall attract LTV ratio of 75 per cent.

The earlier guidelines said the 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.

(PTI Report)