The Reserve Bank of India (RBI) has raised the gold loan limit to Rs 4 lakh under the Bullet Repayment Scheme for urban cooperative banks.
This enhancement is granted to urban cooperative banks that have met their priority sector lending targets by March 31, 2023.
What’s the Bullet Repayment Scheme?
Under this scheme, borrowers repay both the principal amount and interest in one lump sum at the end of the loan term.
Although interest accumulates monthly, the repayment is made in a single ‘bullet’ payment.
RBI Governor Shaktikanta Das explained, “This move aligns with our previous announcement that urban cooperative banks meeting priority sector lending targets by March 31, 2023, will receive appropriate incentives.”
The RBI had earlier stated that incentives would be provided to urban cooperative banks meeting credit targets in the primary sector by March 2023.
In its latest monetary policy review, the RBI kept the policy repo rate at 6.5 percent for the fourth consecutive time, meaning no change in monthly installments (EMIs) for various loans, including housing and vehicles.
