Advise RBI to reconsider gold loan norms, CM Stalin urges FM Nirmala Sitharaman

CHENNAI: Chief Minister MK Stalin on Wednesday urged Union Finance Minister Nirmala Sitharaman to advise the Reserve Bank of India (RBI) to reconsider the proposed restriction in the Reserve Bank of India (Lending against Gold collateral) Directions, 2025.

Expressing grave concern regarding the draft directions issued by the RBI on lending against gold collateral, which seek to prohibit banks from accepting gold as security for agricultural loans up to Rs 2 lakhs, Stalin said, “The proposal is likely to result in serious disruptions to the rural credit delivery system in Tamil Nadu and across many parts of South India, where gold-backed loans serve as a primary source of timely, short-term agricultural credit, especially for small and marginal farmers, tenant cultivators, and those engaged in allied sectors such as dairy, poultry, and fisheries.”

Pointing out that RBI draft directions would disrupt access to formal credit, increase reliance on inform lending channels, pose operational challenges for lenders/borrowers, negatively impact seasonal and input credit flow, and adversely affect priority lending sectors, the Chief Minister, said, “It is imperative that gold continued to be accepted as collateral for agricultural and allied loans up to Rs 2 lakhs, in recognition of its practical utility and the prevailing rural credit realities.”

“I strongly suggest that a balanced regulatory approach, one that upholds credit discipline while preserving financial access for the vulnerable, would be more appropriate and equitable,” Stalin added, requesting her attention and early intervention in the matter of critical importance to the farming community and rural economy.

DMK agri wing to protest against RBI guidelines tomorrow

The agriculture wing of the DMK announced a protest in association with the various farmers' associations demanding the immediate revocation of the new gold loan guidelines, on May 30.

Agriculture wing secretary AKS Vijayan said a protest would be held in front of the head post office in Thanjavur condemning the new guidelines, alleging that it was notified in favour of corporate firms and against the interest of farmers, middle class, and poor people.

Announcing the protest, Vijayan insisted that the RBI must immediately revoke the guidelines, which include mandatory furnishing of the gold purchase receipt or appropriate document to avail gold loan and full repayment of the loan to avail of fresh loans.