RBI report on gold loans beneficial to companies

The recent observations by the Reserve Bank of India (RBI) on gold loan companies are expected to help NBFCs (non banking finance companies). RBI has recommended LTV (loan to value ratio) to be raised to 75% from 60% currently. “Earlier, this was a grey area with a risk that RBI may arrest the loophole. But if the rate is fixed at 75%, then it would not lead to any material change on ground as to the amount of loan the NBFCs can disburse against jewellery, while concerns regarding the grey area would be eliminated,” said Angel Broking in a recent report. Read more