30-05-2025
- Business
- New Indian Express
RBI norms won't affect disbursal of gold loans in co-operative societies: Minister Periyakaruppan
CHENNAI: While the Reserve Bank of India's (RBI) draft guidelines on gold loans have faced stiff opposition from a section of political parties and farmers' associations, the state cooperative department on Thursday clarified that crop loans provided after taking gold as collateral through 4,456 Primary Agriculture Cooperative Credit Societies (PACCS) will continue as usual, since these institutions are not governed by the RBI.
These 4,456 PACCS, which operate through 225 branches and serve 12,620 village panchayats, extend credit to local residents for both agricultural and non-agricultural purposes. For the financial year 2024-25, PACCS disbursed loans amounting to Rs 15,692 crore to 17,37,460 farmers, according to official data shared by the department.
Minister for Cooperation K R Periyakaruppan at the secretariat on Thursday said the PACCS are not regulated by the RBI and therefore are not subject to the proposed gold loan guidelines. 'The crop loans issued by PACCS to farmers will continue as usual,' he told the media.
Department officials further clarified that the proposed RBI norm which prohibits banks' from accepting gold as security for agricultural loans up to Rs 2 lakh also will not be implemented at PACCS.
