Drop new rules on gold loans, TN farmers urge RBI

CHENNAI: Tamil Nadu Vivasayigal Sangam general secretary PS Masilamani on Monday flayed the new regulation of the RBI that directed the banks to ensure gold loans are repaid and closed rather than renewed or upgraded.

The farmer leader has alleged that the move has affected the working class people particularly farmers and urged Union government to initiate steps to withdraw the regulation. He warned that a statewide protest would be organised, if the Centre doesn’t heeds to the demands.

According to Masilamani who claimed that the RBI was not concerned about the farmers, poor people and the middle class. He charged that RBI’s the new regulation on gold loan is ill informed one. As the new regulation prevents the customer from renewing the loan for another term, the banks can opt for auctioning the jewels for failing to repay and close the loans, he said.

So far the people, particularly the farmers, opted for gold loans from the banks for going ahead with their cultivation since many of them were denied crop loans and this facility had a greater support for the farmers, the farmer leade said. However, due to various factors including failed yield and crop damage several farmers are led to renew their gold loans instead of closing them for loss.

As the new regulation directly attacks the farmers, the RBI should reconsider the order and withdraw the new norms, he said.