In order to ease cash flows of people amidst pandemic, the Reserve Bank of India on Thursday has decided to expand the limit of LTV against Gold. The decision was announced after meeting of monetary policy committee.
The existing guidelines allow credit against gold ornaments and jewellery for non-agricultural purposes up to 75 per cent of the value of the metal pledged. Now till March 31, 2021 people can borrow up to 90% value of Gold.
The RBI Governor Shaktikanta Das said: With a view to mitigating the impact of COVID-19 on households, it has been decided to increase the permissible loan to value ratio (LTV) for such loans to 90 per cent. This relaxation shall be available till March 31, 2021.
It is worth noting here that Gold prices have seen historical rally since March 2020. Gold prices have jumped from Rs 38,400 per 10 grams on March 16, 2020 to Rs 57,635 as August 6, 2020. As a result a steep surge in Gold Loans has also been recorded.
Reshma Rawat is a passionate writer with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra and writes blogs & webpages on financial products (loans, credit cards, insurance, government financial policies, mutual funds, etc.).
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