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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI Circular: Enhanced Gold Loan Limits for UCBs

06-Oct-2023 | RBI/2023-24/66 DOR.CRE.REC.42/07.10.002/2023-24

RBI has issued a circular, dated October 6, 2023, regarding Gold Loan - Bullet Repayment - Primary (Urban) Co-operative Banks (UCBs).

The circular references an earlier directive from October 30, 2014, which permitted UCBs to extend gold loans up to ?2.00 lakh with a bullet repayment option, subject to certain conditions.

Further, the circular draws attention to paragraph 5 of a circular dated June 8, 2023, which mentioned that incentives for UCBs meeting Priority Sector Lending (PSL) targets would be announced separately. As per the recent announcement made in the Statement on Developmental and Regulatory Policies dated October 6, 2023, the monetary ceiling for gold loans with bullet repayment has been increased from ?2.00 lakh to ?4.00 lakh for UCBs that have met the overall PSL target and sub-targets as of March 31, 2023, and continue to meet the prescribed targets.

These new limits are effective immediately from the date of this circular. All other provisions of the aforementioned circulars remain unchanged.

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