Previously, last year, banks were permitted by the RBI to sanction loans against gold and jewellery with a payment of the full amount on maturity, and that the loan amount limit had to be within Rs.1 lakh. Also, a Loan to Value (LTV) ratio was introduced in which the borrower would receive loan upto 75 per cent of the value of the gold jewellery that was pledged. In the new relaxation, the LTV still remains, reports add. The RBI noted that banks had made representations seeking raising the limit on gold loans for non-agricultural use and norms related to interest and principal payable at maturity, reports add.
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