RBI raises LTV ratio for gold loans to 90 pc

The Reserve Bank of India on Thursday raised the permissible loan to value (LTV) ratio for gold loans for non-agricultural purposes to 90 per cent from 75 per cent. The earlier guidelines said the loans sanctioned by banks against pledge of gold ornaments and jewellery for non-agricultural purposes should not exceed 75 per cent of the value of gold ornaments and jewellery.

The Reserve Bank of India on Thursday raised the permissible loan to value (LTV) ratio for gold loans for non-agricultural purposes to 90 per cent from 75 per cent. “With a view to further mitigate the economic impact of the COVID-19 pandemic on households, entrepreneurs and small businesses, it has been decided to increase the permissible loan to value ratio for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent,” RBI said in its Statement on Developmental and Regulatory Policies.

The said relaxation shall be available till March 31, 2021, the central bank said. A detailed guidelines on this will be issued by RBI later on Thursday. The earlier guidelines said the loans sanctioned by banks against pledge of gold ornaments and jewellery for non-agricultural purposes should not exceed 75 per cent of the value of gold ornaments and jewellery.

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