Gold Loan News: RBI Increases Gold Loan Limit to Rs 4 Lakh for Urban Cooperative Banks

07 Oct, 2023 Author: Ayushee Joshi

Gold Loan: As the festive season approaches, the Central Bank of India has given a special offer to the Urban Cooperative Banks. The Reserve Bank of India (RBI) has introduced revisions to the Bullet Payment Scheme, simplifying the requirements for gold loans for Urban Cooperative Bank. In declaring the decisions, RBI Governor Shaktikanta Das stated that urban cooperative banks would now be permitted to provide gold loans up to Rs 4 lakh under the Bullet Payment Scheme. The limit has been increased for urban cooperative banks that have fulfilled all the priority sector lending objectives by March 31, 2023.

Facility Available in Limited Banks

Only a few urban cooperative banks will gain from the Bullet Payment Scheme amendment. The RBI Governor stated that the new regulations will not apply to village cooperative banks. As a large number of individuals are associated with cooperative banks and depend on them for their financial needs, people will now have more options to receive gold loans. Along with this, cooperative banks will profit from a rise in the gold loan ceiling, allowing them to disburse more loans and grow their company. The Reserve Bank of India initially allowed loans up to Rs 1 lakh under this arrangement. This limit was raised to Rs 2 lakh in 2014. Urban Co-operative Banks can provide a 12-month gold loan using the Bullet Payment Scheme or the EMI payment method.