RBI has made changes to some key loan rules to provide relief to the common man
The Reserve Bank of India (RBI) has announced several major changes related to loans to provide relief to the common man. The RBI has announced several new changes to make it easier to get a loan and to slightly relax the rules related to large loans. Three of these changes will come into effect from October 1st, while the remaining four are still under consideration.
RBI has given significant relief to the common man
Now, if you have a floating rate loan, banks can reduce your EMI even before the three-year lock-in period. This will benefit you directly and your EMI may be reduced. Additionally, those on fixed-rate loans may be offered the option to switch to a floating rate. While this won't be mandatory, banks can offer this option if they wish.
This will provide flexibility to borrowers and make it easier to choose the right interest rate based on the timeframe.
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Gold Loan Made Easy
If you're considering a gold loan, there's good news: not only jewelers but also those who use gold as raw material, such as small businesses and artisans, can now obtain loans against gold. This will make it easier for small businesses to raise working capital.
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Furthermore, the RBI has proposed increasing the repayment period for Gold Metal Loans (GML) from 180 days to 270 days. Furthermore, non-manufacturing jewelry retailers will also be able to use GML for outsourcing. All these changes could prove extremely beneficial for the MSME and jewelry sectors.
Banks will find it easier to raise capital
The RBI has simplified the way for banks to raise funds through offshore markets. Banks can now raise more funds by issuing bonds in foreign currency or rupees. This will strengthen their financial position and enable them to lend more. The RBI has also proposed changes to regulations for foreign bank branches operating in India. New rules will now apply to their large loan exposures and inter-group transactions. This will help reduce risk.
Credit data will be more accurate
The RBI has recommended that banks and financial institutions submit data to credit bureaus every week, up from the previous biweekly rate. This will reduce errors in individuals' credit reports and allow them to be corrected in a timely manner. Furthermore, the CKYC number will now be included in the reports, simplifying the identification process.
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