The Reserve Bank of India (RBI) has prohibited non-banking finance companies (NBFCs) of all kinds from lending more than Rs. 20,000 in cash against gold.
The NBFCs have been told to issue cheques for loan amounts above this prescribed limit.
Earlier, NBFCs had been directed to disburse only high value loans of Rs. 1 lakh and above against gold by cheque.
The RBI has now decided to reduce the cash disbursal limit on loan against gold to Rs. 20,000 from Rs. 1 lakh in line with the provisions of the Income-Tax Act. The RBI fiat comes into effect immediately.