All Regional Rural Banks
Dear Sir / Madam,
of Gold Loan
Please refer to circular
RPCD.CO.RRB.BC.No.22/03.05.34/2010-11 dated September 22, 2010 wherein
Regional Rural Banks (RRBs) were permitted to grant gold loans up to
Rs.1.00 lakh with bullet repayment option.
2. On a review, it has been
decided to increase the quantum of loan that could be granted under the
scheme, from Rs.1.00 lakh to Rs.2.00 lakh subject to the following
(i) The period of the loan shall
not exceed 12 months from the date of sanction.
(ii) Interest will be charged to
the account at monthly rests but will become due for payment along with
principal only at the end of 12 months from the date of sanction.
(iii) RRBs should maintain a
Loan to Value (LTV) ratio of 75% on the outstanding amount of loan
including the interest on an ongoing basis, failing which the loan will be
treated as a Non Performing Asset (NPA).
(iv) The valuation of gold would
be as per instructions contained in para 3 of the circular
RPCD.RRB.RCB.BC.No.08/03.05.33/2014-15 dated July 1, 2014.
3. It is clarified that crop
loans sanctioned against the collateral security of gold/gold ornaments
shall continue to be governed by the extant income recognition, asset
classification and provisioning norms for such loans.
Chief General Manager