Nagapattinam cooperative institutions announce higher gold loan limits up to ten thousand rupees per gram

Cooperative banks and institutions in Tamil Nadu will now provide gold loans up to ten thousand rupees per gram, according to Nagapattinam regional joint registrar Fathima Sulthana. This new loan limit applies to both freshly issued gold loans and existing loans that are currently being renewed by borrowers.

Loan Rules

Under the revised guidelines decided at a meeting, the loan amount is fixed at a maximum of ten thousand rupees per gram or seventy-five percent of the market value of the gold, whichever applies. Previously, loans were capped at a maximum of seven thousand rupees per gram or seventy-five percent of market value, with six-month loans calculated using monthly average market rates. Last year, the maximum interest rate on gold loans was raised from twelve percent to thirteen percent.

Interest Rates

To bridge the gap between interest rates charged by district central cooperative banks and primary agricultural cooperative societies, new orders have been issued. The interest rate charged by district central banks to primary agricultural societies must now be at least one point two five percent lower than the public gold loan rate at district central bank branches. Additionally, the profit margin for primary agricultural cooperative societies is instructed not to exceed two point two five percent.

Context

Gold loans are a common financial option in rural and semi-urban areas across India, offering quick access to cash through cooperative networks. Cooperative banks often adjust these lending limits and interest structures to manage market shifts and support local borrowers.