Gold Loan: The Reserve Bank of India (RBI) has decided to increase the loan-to-value (LTV) ratio for gold loans from 75 percent to 85 percent. This has led to a surge in the shares of many companies.
Gold Loan: The Reserve Bank of India (RBI) on Friday made a big change in the rules for taking gold loans. This has brought relief to small borrowers. In fact, the Reserve Bank has decided to increase the loan-to-value (LTV) ratio from 75 percent to 85 percent for gold loans up to Rs 2.5 lakh.
What does the increase in the loan-to-value ratio mean?
This means that if you are pledging gold worth Rs 1 lakh, then instead of the earlier Rs 75,000, you will now get a loan of up to Rs 85,000 on it. This will facilitate small businessmen or the middle class, who take loans against gold to fulfill their small needs.
Loan-to-Value (LTV) is the ratio that determines how much percent loan you can take on the price of gold. With this decision of the Reserve Bank, if you have gold worth 1 lakh, then you will get a loan of up to Rs 75,000 and if you have less than Rs 2.5 lakh, then you will be able to take a loan up to 85 percent.
Shares of these companies rise
Since the gold loan process is fast, if you suddenly need money, you can take a loan by mortgaging the gold you have. Gold is also seen as a safe investment to get financial help in difficult times.
On the other hand, after this announcement of the Reserve Bank, there was a stir in the shares of companies giving gold loans. Shares of gold loan giving company Muthoot Finance rose by 7 percent today to Rs 2470. Similarly, the shares of Manappuram Finance also saw a rise of 5 percent and the price reached Rs 246.48. While the shares of IIFL Finance reached the level of Rs 452.45 with a rise of 4.50 percent.
