RBI: NBFCs cannot lend more than INR 20000 against gold

Q.  RBI has prohibited NBFCs from lending how much in cash against gold?
- Published on 14 Mar 17

a. INR 20,000
b. INR 25,000
c. INR 26,000
d. INR 21,000

ANSWER: INR 20,000
 
In a fresh move towards a cashless economy, the RBI prohibited the NBFCs of all kinds from lending more than INR 20,000 in cash against gold.

NBFCs have issued cheques for numerous loan amounts above prescribed limits. NBFCS have been directed earlier to disburse only high value loans of INR 1 lakh or more against gold by cheque.

The decision to limit the loan on gold to INR 20,000 from INR 1 lakh is in line with the IT act.

NBFCs: Know More
  • A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956.
  • It is engaged in the business of loans and advances, acquisition of shares/ stocks/ bonds/ debentures/ securities.
  • It is issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business.
  • It does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
  • A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in instalments by way of contributions or in any other manner, is also a non-banking financial company.

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