how does it work? Once the borrower pays the total principal and interest amount at the end of the year, the loan limit expires. Simply put, the borrower can repay the debt and take the loan again the next day.
Reserve Bank of India ( RBI ) Has changed the rule of bullet gold repayment loans for urban cooperative banks. RBI has doubled the debt ( gold loan ) to four lakh rupees in lieu of gold under the Bullet Repayment Gold Loan Scheme. Under the ‘ bullet ’ repayment scheme, the borrower pays the principal amount and interest outright at the end of the loan period. Although interest on debt in lieu of gold is assessed every month during the entire period, the principal amount and interest have to be paid one-time. That is why it is known as ‘ Bullet ’ Repayment. However, this limit has been extended to urban cooperative banks that have met all targets under debt to the primary sector by 31 March 2023.
How will loan takers help?
Loan takers in Bullet Gold Repayment Loans do not have to pay regular monthly EMIs, so they get more time and flexibility to repay the loan. Earlier, all state and central cooperative banks were allowed to give gold loans up to Rs 1 lakh with a bullet repayment option. So far, the duration of such loans usually does not exceed 12 months from the date of approval. According to the RBI, under the Bullet Repayment Scheme, banks have to maintain a debt-to-value ( LTV ) ratio of 75% on the loan amount including interest. When borrowers complete the bullet repayment, they can immediately take possession of the mortgaged gold. Another option is to take advantage of the limit rollover option under bullet repayment when you are facing a cash crisis.
how does it work?
Once the borrower pays the total principal and interest amount at the end of the year, the loan limit expires. Simply put, the borrower can repay the debt and take the loan again the next day. Suppose you have taken a gold loan of Rs 4 lakh at an interest rate of 11% for a period of one year under the Bullet Repayment Scheme. You do not have to pay any interest and principal to the lender during the loan period. Now, at the end of the loan period, you have to pay Rs 4,43,992 which includes Rs 4 lakh principal amount and Rs 43,992 interest. Now, once you return it at the end of the year, the next day the loan limit will be raised again to Rs 4 lakh। You can take a new loan from the next day.
Governor Shaktikant Das announced
RBI Governor Shaktikant Das announced the bimonthly monetary policy review, saying, Urban Cooperative Banks ( UCB ) who have completed the sub-target till the overall target under priority sector loans ( PSL ) by 31 March 2023, It has been decided to increase the existing limit of gold loan from two lakh rupees to four lakh rupees under the bullet repayment scheme for them. Das said that this measure is under our previous declaration, Which stated that UCBs meeting the primary sector debt targets set by 31 March 2023 would be given appropriate incentives. The RBI said in a monetary policy review in June this year that the primary sector gave suitable incentives to urban cooperative banks to meet the targets set under debt by March 2023. The RBI retained the policy rate repo at 6.5 per cent for the fourth consecutive time on Friday. This means that houses, There will be no change in the monthly instalment ( EMI) on various debts including the vehicle.
