Stalin Appeals Against RBI's Gold Loan Restrictions

Tamil Nadu Chief Minister M K Stalin has made a direct appeal to the Union government to reconsider new Reserve Bank of India (RBI) directives, which propose restrictions on using gold as collateral for agricultural loans up to Rs 2 lakh. Stalin asserts these changes could disrupt rural credit systems in the state.

In a letter to Union Finance Minister Nirmala Sitharaman, Stalin argued for maintaining gold-backed loans, citing their crucial role for small and marginal farmers lacking formal documentation. He warned that such restrictions could drive borrowers towards informal moneylenders with high interest rates, exacerbating financial struggles.

Stalin's concerns extend to potential obstacles in meeting seasonal agricultural expenses, which could impact productivity and rural economic cycles. The Chief Minister called for a balanced regulatory approach that preserves financial accessibility while ensuring credit discipline, urging the RBI to reconsider their position.

(With inputs from agencies.)