RBI CLAMPS DOWN ON GOLD LOANS BY NBFCs

The Reserve Bank of India (RBI) has directed NBFCs (Non-Banking Financial Companies) not to give loans exceeding 60 per cent of the value of the gold jewellery pledged with them. NBFCs (Non-Banking Financial Companies) primarily engaged in lending against gold jewellery have been asked not to grant any advance against bullion/primary gold and gold coins. RBI (Reserve Bank of India) said NBFCs (Non-Banking Financial Companies) primarily engaged in lending against gold jewellery (such loans comprising 50 per cent or more of their financial  assets) will be required to maintain a minimum Tier-l capital of 12 per cent by April 1, 2014.