Non-Banking Finance Companies (NBFCs) cannot lend more than Rs 25,000 in cash against gold said Reserve Bank of India (RBI).
Prior to this, NBFCs were directed to release high value loans against gold of Rs 1 lakh and above only be disbursed by cheque.
Reportedly, RBI reduced the amount to Rs 25,000 from the earlier permissible limit of Rs 1 lakh in line with the provisions of the Income Tax Act 1961.
“This assumes significance in the backdrop of government’s focus on less cash economy and promoting digital payments,” said RBI.
Post demonetisation, RBI initiated several restrictions on cash withdrawals from the bank branches and ATMs. However, except the restriction on the savings bank account all other restrictions were gradually lifted. The cash withdrawal limit on savings bank account too will be removed from March 13.
