Giving relief to those looking for immediate funds, the Reserve Bank of India on Thursday announced that loan to value ratio or LTV for loans sanctioned against pledge of gold ornaments from 75 pct to 90 pct. As per the announcement, the relaxation shall be available till March 31, 2021. The relaxation benefits will be for banks specifically.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

As per extant guidelines, loans sanctioned by banks against pledge of gold ornaments and jewellery for non-agricultural purposes should not exceed 75 percent of the value of gold ornaments and jewellery.  

Addressing the media during an online briefing, RBI governor Shaktikanta Das said that it has been decided to increase the permissible loan to value ratio (LTV) for such loans to 90 percent. The decision comes in the wake of COVID1-9 impact on households.  

“With a view to further mitigate the economic impact of the Covid19 pandemic on households, entrepreneurs and small businesses, it has been 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 per cent to 90 per cent. This enhanced LTV ratio will be applicable up to March 31, 2021 to enable the borrowers to tide over their temporary liquidity mismatches on account of COVID 19. Accordingly, fresh gold loans sanctioned on and after April 1, 2021 shall attract LTV ratio of 75 per cent,” the official statement said.

WATCH Zee Business LIVE TV Streaming Online

To enhance safety of cheque payments, RBI governor Shaktikanta Das said that it has been decided to introduce a mechanism of positive pay for all cheques of value Rs 50,000 and above. This will cover approximately 20 percent and 80 percent of total cheques by volume and value, respectively. Operational guidelines in this regard will be issued separately. 

Meanwhile, the MPC unanimously decided to keep the repo rate unchanged at 4 per cent while maintaining the accommodative stance. Das said that reverse repo rate also remains unchanged at 3.35 per cent.  

“Accommodative stance of Monetary Policy to continue as long as necessary to revive growth and mitigate impact of COVID19, while ensuring inflation remains within target going forward,” Das said, while addressing media, during an online briefing. 

He further announced that Marginal Standing Facility Rate and bank rate remains unchanged at 4.25%. 

The RBI governor said that domestic food inflation has remain elevated across economies ever since the Coronavirus outbreak and added that agriculture sector prospects have improved with the good monsoons and rise in Kharif sowing area. MPC is expected inflation to stay elevated in Q2FY21 but is of the view that is it likely to ease in H2 aided by favourable base effects, Das said.