look news india
If you have ever taken a gold loan from any bank or NBFC in time of need, then it is important for you to stay updated with this news. RBI has asked NBFCs not to pay more than Rs 20,000 in cash while giving loans against gold as per income tax rules. Earlier this week, the Reserve Bank of India had issued an advisory to financiers and microfinance companies offering loans against gold to comply with Section 269SS of the Income Tax Act.
Section 269SS of the Income Tax Act provides that a person cannot accept deposits or loans on behalf of any other person except in specified modes of payment. The cash limit in this section is Rs 20,000. A few weeks before this advisory, RBI had barred IIFL Finance from sanctioning or disbursing gold loans after it found certain concerns during its inspection.
Commenting on this advice of RBI, Manipuram Finance MD and CEO VP Nandakumar said that it has reiterated the limit of Rs 20,000 for giving cash loans. He said half of Manipuram Finance's loans are given online and even for loans availed from the branch, most customers prefer direct transfer.