Legal UpdatesRBI

RBI increases LTV to 90% against Gold & Jewellery for Non-Agricultural End-users

RBI Updates

RBI on 6th August 2020 has decided to increase the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75% to 90%. Further, RBI has clarified that the specific enhancement of LTV ratio would be applicable up to March 31, 2021 thereafter fresh gold loans sanctioned on and after April 1, 2021 would attract LTV ratio of 75%. The respective decision has been made to enable the borrowers to tide over their temporary liquidity mismatches on account of COVID 19. 

Priorly, as per the circulars DBOD.No.BP.BC.27/21.04.048/2014-15 July 22, 2014 and DBR.RRB.BC.No.53/31.01.001/2016-17 dated February 16 banks would sanction loans not exceeding 75% of the value of gold ornaments and jewellery . 


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