Non-Banking Finance Companies (NBFCs) cannot lend more than Rs 25,000 in cash against gold according to RBI.
The earlier provision for NBFC was that high-value loans against the gold of Rs 1 lakh and above must only be disbursed by cheque.
RBI reduced the amount to Rs 25,000 from the earlier Rs 1 lakh in line with the provisions of the Income Tax Act. The decision was taken in the backdrop of government’s focus on less cash economy and promoting digital payments.
Source- The Hindu