RBI Monetary Policy: RBI implemented new rule for cooperative banks, customers will get this benefit

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Reserve Bank of India: The Reserve Bank of India (RBI) has doubled the loan against gold (gold loan) under the Bullet Repayment Scheme for urban co-operative banks to Rs 4 lakh.

This limit has been extended for those urban co-operative banks which have met all the targets under priority sector lending by March 31, 2023. The benefit of this relief given by RBI to banks will be available to those customers who have accounts in urban cooperative banks. Banks take gold loan as per their need.

Payment of principal amount and interest together

Announcing the bi-monthly monetary policy review, RBI Governor Shaktikanta Das said, ‘Urban Co-operative Banks (UCBs) which have completed the sub-target up to the overall target under Priority Sector Lending (PSL) by March 31, 2023. Such banks have decided to increase the current limit of gold loan from Rs 2 lakh to Rs 4 lakh under the Bullet Repayment Scheme. Under the ‘Bullet’ repayment plan, the borrower makes a lump sum payment of the principal amount and interest at the end of the loan tenure.

Why called ‘Bullet’ Repayment Plan?

However, the interest on loan against gold is calculated every month during the entire tenure. But the principal amount and interest will have to be paid once. That’s why it’s known as ‘bullet’ repayment. “This measure is in line with our previous announcement that appropriate incentives will be given to UCBs that meet priority sector lending targets by March 31, 2023,” Das said.

The RBI had said in the monetary policy review in June this year that appropriate incentives would be given to urban cooperative banks that meet the targets set under credit to the priority sector by March 2023. RBI on Friday kept the policy rate repo rate at 6.5 percent. For the fourth consecutive time. This means that there will be no change in the monthly EMI on various loans including home and vehicle.

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