New Delhi. The Reserve Bank of India has made a major change in rules for customers. This will benefit all customers in the country, as it will not only simplify EMIs but also make loans cheaper and easier for people.
Gold loan borrowers will especially benefit from this. The RBI has also relaxed rules for larger loans. Some of these changes will come into effect on October 1st, but four rules are currently only in the proposal stage, and feedback has been sought from stakeholders.
The most notable rule change introduced by the Reserve Bank is the relaxation of spreads on floating-rate loans. Customers will now be able to avail this benefit even before the three-year lock-in period. This means that borrowers will benefit from the interest rate cut sooner. This will not only reduce EMIs, but customers will also have to pay lower interest. Furthermore, the RBI has also given customers the option to convert their loans from floating-rate to fixed rates if interest rates fall.
Have the rules changed for gold loans?
The RBI has also simplified the rules for gold loans and loans against silver. Until now, only NBFCs and scheduled banks could offer gold loans. However, with this change, smaller banks and small cooperative banks (Tier-3 and Tier-4) will also be able to offer such loans. This loan will be available to anyone who uses gold for emergencies. Until now, such loans were only offered to jewelers. However, now any business owner can avail of this type of loan.
What changes are needed for more loans?
The RBI has also extended the term of the gold metal loan facility for jewelers. Currently, the term is 180 days, but now it can be extended to 270 days. Furthermore, this loan will be available to jewelers who do not manufacture their own jewelry. Such jewelers will be used for outsourcing work. This will obviously benefit small jewelers who import and sell jewelry from other locations.
Along with changing loan rules, the Reserve Bank has also
changed the rules regarding CIBIL scores. In a proposal, the RBI stated that credit-lending institutions will now be required to submit weekly reports. Currently, this report was submitted every 15 days. The proposal also states that credit errors can be corrected quickly. KYC numbers will also be included in customer reports. Currently, the RBI has sought comments on all these proposals, which must be submitted by October 20th.
