NRTWB chairperson seeks Union Finance Minister’s intervention to withdraw new RBI norms on gold loans

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The Non-Resident Tamils Welfare Board (NRTWB), under the Tamil Nadu government, has requested the Union Finance Minister’s intervention for the withdrawal of the new Reserve Bank of India (RBI) guidelines on jewel loans, citing hardship to the general public.

NRTWB chairperson Karthikeya Sivasenapathy urged the Union Minister to instruct the RBI to withdraw or significantly revise the guidelines in consultation with stakeholders, especially State governments, MPs, and grassroots banking networks.

“At a time when the Government of India is making efforts to increase financial inclusion and reduce rural indebtedness, these guidelines inadvertently aid the private sector and usurious moneylenders in taking over the critical segment of gold loans,” Mr. Sivasenapathy contended in a letter to the Union Minister.

Gold loans, particularly from public sector banks, have historically served as a lifeline for millions during financial distress — whether for education, health emergencies, agricultural needs, or family obligations, he said.

He also expressed certain concerns over the reduction of Loan-to-Value (LTV) ratio, over-emphasis on documentation, original receipts, and ownership proof, delayed return of gold, and the impact on the MSME and agricultural sectors.

“These measures will undoubtedly push common people toward NBFCs and private financiers, discredit and erode trust in the public sector banking system, and worsen financial exclusion, especially in rural and semi-urban areas,” Mr. Sivasenapathy contended.