It may be the bad news for those who want sufficient cash or high-value loans against their gold deposits in Non-Banking Finance Companies (NBFCs) as Reserve Bank of India (RBI), on Thursday, capped the loan amount upto Rs 25,000 in cash against the yellow metal.
Earlier, there was a provision that NBFC was lending high-value loans to its prospective customers upto Rs 1 lakh and above against gold deposits which were disbursed by cheque only. Now, the central bank reduced the amount to Rs 25,000 from the earlier Rs 1 lakh in line with the provisions of the Income Tax Act. “The relevant threshold under the Income Tax Act, 1961 is Rupees Twenty thousand,” the central bank said, while amending the provisions for disbursal of loan amount in cash by NBFCs.
This assumes significance in the backdrop of Government’s focus on less-cash economy and promoting digital payments.