RBI Rules: The Reserve Bank of India (RBI) has issued strict instructions for non-banking financial comp.es (NBFCs), according to which no NBFC can give cash loans of more than Rs 20,000 to customers. Under Section 269SS of the Income Tax Act, 1961, no person is allowed to take a cash loan of more than Rs 20,000.
A report says that RBI now wants to tighten this rule, so that NBFC comp.es do not have to face risks and ignore the rules. RBI has issued this notification at a time when NBFC company IIFL Finance has been accused of violating many rules. The report said some comp.es lent and collected cash in excess of the limits set by law.
Loan amount should not exceed Rs 20 thousand in cash
RBI has written a letter to NBFC informing about this and said that as per the rules, no customer can be given a cash loan of more than Rs 20 thousand. In such a situation, no NBFC should give a loan amount of more than Rs 20,000 in cash.
Why did RBI issue such instructions?
In the last few days, the Reserve Bank of India has taken action against many NBAC comp.es. These comp.es ignored the RBI rules. The rules for giving more cash loans were also violated. In such a situation, RBI has issued such instructions to NBFCs reminding them of the rules, so that carelessness and ignoring the rules can be prevented.
Why was action taken against IIFL Finance?
It is noteworthy that due to major lapses in loan management, the central bank had directed IIFL Finance to immediately close its gold loan operations for new customers. IIFL Finance’s gold loan operations contribute significantly to its business, accounting for one-third of its business. The finance company violated norms such as inadequate verification of purity and weight of gold, excessive cash lending, deviation from standard auction procedures and lack of transparency in customer account charges.
