Banks to gain from draft gold-loan norms

THE RESERVE BANK of India's draft guidelines to set up a harmonised regulatory framework for gold loans will help banks gain a larger share of the market at the cost of non-banking finance companies (NBFCs) due to competitive pricing, said B Ramesh Babu, managing director and CEO of Karur Vysya Bank (KVB).

- FE BUREAU

Babu said a uniform regulatory framework for banks and NBFCs would ensure a level playing field. NBFCs typically charge interest rates of 18-20% while banks offer rates close to 10% — lower rates could encourage more borrowers to shift to banks.

NBFCs will face the heat as they need to recalibrate disbursement values, KVB managing director & CEO B Ramesh Babu said.