RBI Restricts Cash Loan Against Gold by NBFC to Rs 25,000
Posted on:11 Mar 2017 09:45:31
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11 March 2017 Current Affairs: The Reserve Bank of India has amended the provision for disbursement of loan by NBFC against the gold on March 9, 2017 in line with the provisions of the Income Tax Act.As per the new provision, the Non-banking Financial Company (NBFC) cannot lend more than Rs 25,000 in cash against gold as against the earlier Rs 1 lakh.The earlier provision for NBFC was that high value loans against gold of Rs 1 lakh and above must only be disbursed by cheque.The decision was taken in the backdrop of government’s focus on less cash economy and promoting digital payments.
About NBFC:A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956.
Functions:Giving loans and advances, acquisition of shares/ stocks/ bonds/ debentures/ securities issued by Government or local authority or other marketable securities.NBFCs lend and make investments similar to that like a banks.NBFC cannot accept demand deposits.NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
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