Good news for agriculturist, Reserve Bank of India has raised the ceiling of gold loans given by regional rural banks (RRB) to Rs 2 lakh from Rs 1 lakh. This will be expanding the access to credit for farmers and artisans willing to pledge gold as collateral for their personal needs.
RRBs is having a very large presence in rural India with 21000 branch network. Gold loan is the part and parcel of lending policies of bank to provide credit to farmers and offer loans for various purposes against the security of gold or gold ornaments. RBI has doubled the gold loan ceiling for loans not exceeding 12 months from the date of sanction.
This facility comes with bullet repayment option. This means the loans will become due for payment only at the end of the tenure. But the interest will be charged at monthly rests.