%20(500%20%C3%97%20280%20px)%20(500%20x%20300%20px)%20(9).png "Gold loan rules: 9 crucial proposals made by RBI in the draft guidelines")
Key Changes & Impact:
a) 70%
b) 75%
c) 80%
d) 90%
- Loan-to-Value (LTV) Cap: Borrowers can pledge gold for a loan up to 75% of its value, preventing excessive leverage and reducing financial risks.
- Proof of Ownership Mandatory: Lenders now require purchase receipts or declarations, ensuring authenticity and minimizing fraudulent pledging.
- Gold Purity Certificate: Borrowers will receive a detailed certificate specifying gold weight, purity, deductions, and valuation, boosting transparency.
- Restriction on Eligible Gold: Loans will be sanctioned only on gold jewellery and bank-sold coins (22-carat purity or higher), preventing substandard collateral.
- Loans Against Silver Introduced: For the first time, silver jewellery and coins (925 purity) will be accepted for loans, expanding borrowing options.
- Limits on Gold Collateral Weight: Borrowers can pledge up to 1 kg of ornaments and 50 grams of gold coins, standardizing lending norms.
- Standardized Gold Valuation: Regardless of purity, pledged gold will be valued at 22-carat rates, ensuring uniform pricing across lenders.
- Detailed Loan Agreements Required: Loan contracts must now explicitly state pledged gold details, auction procedures, repayment terms, and fees, enhancing borrower clarity.
- Bullet Repayment Restrictions: Bullet repayment for consumption loans is now capped at 12 months, preventing misuse of flexible repayment options.
Question:
Q.1 What is the new Loan-to-Value (LTV) cap set by the RBI for gold loans?a) 70%
b) 75%
c) 80%
d) 90%
Answer: b) The RBI has capped the LTV ratio at 75% to prevent excessive borrowing against gold and mitigate financial risks. This ensures borrowers do not over-leverage their assets
