Nowadays,large number of NBFC’s have started giving loans against the Gold Jewellery and the size of the Loan Portfolio is in increasing trend day by day. In order to regulate the same and as a prudential measure , the reserve bank of India vide its Notification dtd 21st March 2012 has imposed certain restrictions on the issue of Gold Loans. As per this notification , all NBFCs shall :-
1) maintain Loan-t0-Value ratio not exceeding 60% for Loans against Jewellery ; and
2) Disclose in their Balance sheet the % of such loans to their total assets.
These NBFCs shall maintain a Tier I Capital of 12% by 1st April 2014.
They shall not grant any advance against bullion/Primary Gold and Gold coins.
Click here to download the relevant Notification.