RBI Clarification on Voluntary Gold Pledge Under Priority Sector Lending
Why in the news
The RBI said borrowers who choose to pledge gold for small loans are not violating collateral-free lending rules, which should lift priority sector credit to farmers and micro units.
Key facts
- Agriculture: voluntary gold pledge up to ₹2 lakh is not collateral-based under PSL.
- MSMEs: same for loans up to ₹10 lakh.
- Gold-backed crop and allied loans (dairy, poultry) count as agricultural lending.
- The clarity ends doubt and permits accurate PSL reporting.
Impact
- Small and marginal farmers gain most, as banks shun unsecured farm loans.
- Banks can lend more to micro enterprises while keeping PSL status.
| PSL segment | Target |
|---|---|
| Priority sector overall | 40% of ANBC |
| Agriculture and allied | 18% |
| Non-corporate farmers | 14% |
| Small and marginal farmers | 10% |
| Micro enterprises | 7.5% |
Exam angle
- Regulator: RBI; limits ₹2 lakh and ₹10 lakh; base: ANBC.