The Reserve Bank of India (RBI) made a significant announcement, doubling the lending limits for gold loans under the bullet repayment scheme for urban cooperative banks (UCBs) to Rs 4 lakh.
RBI Governor Shaktikanta Das stated, "It has been decided to increase the existing limit for gold loans under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as of March 31, 2023." In a bullet repayment scheme, borrowers repay both interest and the principal amount at the end of the loan tenure without periodic repayments.
This decision aligns with the RBI's earlier commitment to provide "suitable incentives" to UCBs that have fulfilled the prescribed PSL targets, where lenders are required to allocate a specific portion of their lending to the marginalized sector.
Furthermore, the RBI, in a circular issued later, confirmed the increase in the monetary ceiling of gold loans granted under the bullet repayment scheme to Rs 4 lakh for UCBs that have met the overall Priority Sector Lending target and sub-targets as of March 31, 2023, and continue to meet those targets.
These revised limits are effective immediately.
Governor Das also announced that the RBI would be introducing a comprehensive regulatory framework for project finance. This initiative aims to strengthen the existing regulatory framework governing project finance and harmonize instructions across all regulated entities. Detailed draft guidelines will be released for public comments.
Additionally, non-bank lenders in the 'middle and base layers' will be permitted to utilize Credit Risk Mitigation instruments to reduce counterparty exposure under the credit concentration norms, similar to their peers classified in the 'upper layer.'
The RBI is also considering introducing Card-on-File Tokenisation (CoFT) creation facilities at the issuer bank-level, enhancing the convenience of e-commerce transactions.
These developments mark significant changes in the financial landscape and are aimed at promoting responsible lending and financial inclusion.
Valiant Laboratories IPO GMP
RBI Governor Shaktikanta Das stated, "It has been decided to increase the existing limit for gold loans under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as of March 31, 2023." In a bullet repayment scheme, borrowers repay both interest and the principal amount at the end of the loan tenure without periodic repayments.
This decision aligns with the RBI's earlier commitment to provide "suitable incentives" to UCBs that have fulfilled the prescribed PSL targets, where lenders are required to allocate a specific portion of their lending to the marginalized sector.
Furthermore, the RBI, in a circular issued later, confirmed the increase in the monetary ceiling of gold loans granted under the bullet repayment scheme to Rs 4 lakh for UCBs that have met the overall Priority Sector Lending target and sub-targets as of March 31, 2023, and continue to meet those targets.
These revised limits are effective immediately.
Governor Das also announced that the RBI would be introducing a comprehensive regulatory framework for project finance. This initiative aims to strengthen the existing regulatory framework governing project finance and harmonize instructions across all regulated entities. Detailed draft guidelines will be released for public comments.
Additionally, non-bank lenders in the 'middle and base layers' will be permitted to utilize Credit Risk Mitigation instruments to reduce counterparty exposure under the credit concentration norms, similar to their peers classified in the 'upper layer.'
The RBI is also considering introducing Card-on-File Tokenisation (CoFT) creation facilities at the issuer bank-level, enhancing the convenience of e-commerce transactions.
These developments mark significant changes in the financial landscape and are aimed at promoting responsible lending and financial inclusion.
Valiant Laboratories IPO GMP
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