‘Unfair’ RBI rules on gold pledging against public, will benefit only pawn shops: Ramadoss

CHENNAI: Slamming the Reserve Bank of India (RBI) for framing a new set of rules on pledging gold, PMK founder S Ramadoss said it will force the poor and middle classes to turn towards usurers and pawn shops and urged the apex bank to roll back new guidelines for banks.

In a statement, the senior leader referred to the RBI's draft rules with nine new rules for gold pledging. "Of the new set of guidelines, some pertaining to gold loans will severely hit the public. As per the rules, customers should provide receipts to prove that the gold that they intend to pledge belongs to them. Moreover, loans will be provided on certain types of gold coins only. These two rules will impede people from getting gold loans," he warned.

Saying that in India, especially in Tamil Nadu, gold jewels are passed on to generations as family properties. Most of them would have been bought a few centuries ago, which are still in use, Ramadoss pointed out, underscoring that demanding the customers to submit receipts is unfair.

"The RBI guidelines allow the customers to provide an undertaking or other documents in case they do not possess receipts. But loans could be denied if there is any suspicion. Also, as per the fourth guideline, loans can only be availed only against the gold coins sold by banks. Persons who bought the coins through other means could not pledge them," he explained.

He added that gold loans were introduced to ensure the easy disbursement of loans. "Already, customers are unable to extend their gold loans. Customers are suffering. The new guidelines will further complicate the loan approval process. This will force the people to approach private pawn shops or usurers," he warned.