RBI Doubles Bullet Repayment Gold Loan Limit for Urban Co-op Banks to Rs 4 Lakh
The Reserve Bank of India (RBI) on Friday announced that it is doubling the bullet repayment gold loan limit for urban cooperative banks (UCBs) from Rs 2 lakh to Rs 4 lakh. This decision will come into effect immediately.
The bullet repayment scheme is a type of loan where the borrower repays the principal amount and interest in a single lump sum payment at the end of the loan term. This is in contrast to other types of loans, where the borrower makes monthly repayments.
To be eligible for the increased gold loan limit, UCBs must have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023.
The RBI”s decision to double the gold loan limit is expected to benefit UCBs and their customers. UCBs will be able to offer more loans to their customers, and customers will have access to more affordable financing options.
Other announcements made by the RBI:
- The RBI will soon announce a comprehensive regulatory framework on project finance.
- The RBI will allow middle and base layers non-bank lenders to leverage Credit Risk Mitigation instruments for slashing their counter party exposure under the credit concentration norms.
- The RBI is considering rolling out Card-on-File Tokenisation (CoFT) creation facilities straightly at the issuer bank level, considering the increasing acceptance and benefits of tokenisation of card data.
