Fearing rapid loss of business to banks, gold loan companies have urged the Reserve Bank of India (RBI) to provide a level playing field. In a recent meeting with the RBI officials, gold loan companies emphasised that the latest move by the banking sector regulator favours banks lending against gold jewellery at the cost of private sector players in this business. The RBI’s move is set to cap branch expansion of the gold loan companies and prove an obstacle in bringing out mounting idle gold in the country. Confirming the meeting, an official with one of the leading gold loan companies said, “We urge to provide us a level playing field as the recent RBI guidelines favour banks.” “Gold loan non banking finance companies (NBFCs) are doing a socially useful function and that provides a strong rationale for careful regulation of the activities” is what the KUB Rao’s final report. The report carried a detailed analysis with the final recommendations, which not only clarified the negative air against the gold loan NBFCs but most importantly clear a roadmap on how to shape the sector for long term growth.
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