Gold Loan: The Reserve Bank of India (RBI) has made a big change in the rules of taking gold lone on Friday. This has brought relief to small borrowers. In fact, the Reserve Bank has decided to increase the loan-to-value (LTV) ratio from 75 percent to 85 % for gold linen up to Rs 2.5 lakh.

What does it mean to grow loan-to-value ratio?

This means that if you are pledging gold worth Rs 1 lakh, then instead of the earlier 75,000, you will get a loan of up to Rs 85,000 on it. This will facilitate small businessmen or middle class, who take loans in exchange for gold to meet their small needs.

Lon-to-Value (LTV) is the ratio, which determines how much percentage you can take at the cost of gold. If you have gold worth 1 lakh with this decision of the Reserve Bank, then you will get a loan of up to Rs 75,000 and if you have less than 2.5 lakh rupees, then you will be able to take a loan up to 85 %.

The shares of these companies boom

Since the process of gold loan is fast, you can take a loan by mortgaging the gold with you if you suddenly needed money. Gold is also seen as a safe investment to get a difficult clock financial help.

Here, after this announcement of the Reserve Bank, there was a stir in the shares of the gold loan companies. Shares of Gold Loan Company Muthut Finance went up to Rs 2470 with a 7 percent lead today. Similarly, the shares of Manapapuram Finance also saw an increase of 5 percent and the price reached Rs 246.48. Whereas with a rise of 4.50 percent, IIFL Finance shares reached a level of Rs 452.45.

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