RBI Guideline On Time-Limit Hurts Gold Loan Takers
KAKINADA: Marriage, agricultural activity, etc. Those who take out gold loans for these purposes are in a difficult situation as bankers will not be able to restructure their loans. The RBI’s revised rule insists that borrowers clear their debts within a year.
Bankers were lenient with gold loan borrowers. If they have paid interest, the loan can be rescheduled or even the previous loan can be closed by giving a new loan. However, in August last year, the RBI issued guidelines that gold loans would not be rescheduled.
When the one-year period expires, the debtor must pay off the debt together with the principal and interest. If he wants to get a gold loan again, there should be a break of a day or two, then bankers can approve the loan.
If the banker finds that the borrower’s CIBIL score is not satisfactory after clearing the gold loan, some bankers refuse to approve the loan and some bankers also give gold loans for less than the specified gold rate.
The biggest victims of the new regulation on gold loans are farmers and tenant farmers. “My relative took a gold loan of Rs2 lakh four years ago. He was paying the interest every year and the banker would reschedule the loan. Sometimes I cleared the loan and took it again. But now the bankers are pressuring me to clear the entire loan,” said a tenant farmer.
“I bought three acres of land in addition to the rent and invested the money there. I pleaded with the bankers to first charge interest and reschedule my loan. But they said they could not do anything, citing new RBI rules,” said YL Prasad, a tenant farmer from Kovvur village.
The tenant farmer said that the interest rates of farmers who have previously applied for agricultural loans are lower than non-agricultural loans. But now bankers collect the same interest on farm and non-farm loans.
He urged the central government, especially finance minister Nirmala Sitharaman, to amend the controversial RBI guidelines and also reduce interest rates for the agriculture sector.
He stated that the central government is giving more incentives to MSMEs, but there is no such incentive for tenant farmers.
“As per the RBI rules, the borrower has to clear the total debt under the gold loan within one year. Even though he has paid interest, the loan account will become NPA within three months and after completion of one year, the CIBIL score will drop immediately,” said a banker.
He said bankers have failed to provide justice to gold loan borrowers as it is a ‘mortgage loan’ in addition to stringent rules of the RBI.
