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  • What Are The Differences Between The Norms Prescribed For Banks and NBFCs

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    surendra kumar
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    Banks and non-banking financial companies (NBFCs) have different norms for gold loans. NBFCs have a 60% loan-to-value cap on jewellery loans, whereas banks do not. Gold loans from banks can be classified as agricultural priority sector loans, but the same loans from NBFCs cannot. Banks also have lower risk weightage and capital adequacy requirements for gold loans compared to NBFCs.

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    RBI Regulations : Difference in requirements from NBFCs and Banks

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    What Are the Differences Between the Norms Prescribed for Banks and NBFCs

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    Banks and non-banking financial companies (NBFCs) have different norms for gold loans. NBFCs have a 60% loan-to-value cap on jewellery loans, whereas banks do not. Gold loans from banks can be classified as agricultural priority sector loans, but the same loans from NBFCs cannot. Banks also have lower risk weightage and capital adequacy requirements for gold loans compared to NBFCs.

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    14 views1 page

    What Are The Differences Between The Norms Prescribed For Banks and NBFCs

    Uploaded by

    surendra kumar
    Banks and non-banking financial companies (NBFCs) have different norms for gold loans. NBFCs have a 60% loan-to-value cap on jewellery loans, whereas banks do not. Gold loans from banks can be classified as agricultural priority sector loans, but the same loans from NBFCs cannot. Banks also have lower risk weightage and capital adequacy requirements for gold loans compared to NBFCs.

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    © All Rights Reserved
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    What are the differences between the norms prescribed for Banks and NBFCs?

    The recent LTV cap of 60% of the value of jewellery is applicable only to NBFCs. Gold loans granted by banks can be classified under agriculture for the purpose of priority sector, whereas the same loan granted by NBFC to the same borrower is not eligible to be classified under the similar category

    Risk weightage of gold loans given by banks with LTV of less than 75% is zero, whereas the same loan given by an NBFC carries a risk weightage of 100%. Capital Adequacy Ratio for banks is only 9% with a minimum Tier-I capital of 6%. For gold loan NBFCs, it is 15% with minimum Tier-I capital of 12%.

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