Finance ministry seeks exemption in gold loan rule

NEW DELHI: The finance ministry on Friday said it has examined the draft guidelines on gold loan by RBI and suggested exclusion of small borrowers of up to Rs 2 lakh from the provisions of the proposed norms amid opposition from a section of political parties in Tamil Nadu.RBI on April 9 issued comprehensive draft guidelines on gold loans with a view to harmonise regulatory framework to enhance underwriting, improve collateral management and monitor the end-use of funds. It also proposed that all loans classified against gold will have a loan-to-value ratio of not more than 75 per cent of the value of gold.