RBI should withdraw restrictions on gold loans: TN Minister

Chennai: Tamil Nadu Finance Minister Thangam Thennarasu on Thursday urged the Reserve Bank of India to immediately withdraw the newly imposed restrictions on gold loans and said the move would impact the poor and middle-class families dependent on such loans.

The RBI's draft guidelines on prudential norms were a blow to the common man, he said.

"Reducing the loan-to-value ratio to 75 per cent (from 80 per cent previously) and burdening borrowers with excessive documentation gravely affects the poor and middle-class families who depend on such loans during emergencies," the minister said in a post on the social media platform 'X'.

Further, he said, at a time when people were still reeling from the earlier rule that disallowed re-pledging until full repayment, the introduction of 9 more rigid guidelines was deeply insensitive. "These measures amount to systemic injustice against the vulnerable. The RBI must adopt compassionate, people-centric policies," Thennarasu stressed.