Question

A borrower approaches a bank for a gold loan against jewellery worth ₹8 lakh. As per RBI's revised gold loan guidelines, which of the following correctly describes the maximum loan amount the bank can sanction if the entire amount is classified as a consumption loan?

A The bank can sanction up to ₹6.80 lakh, as the LTV ratio is 85% for all consumption loans against gold.
B The bank can sanction up to ₹6 lakh, as LTV is capped at 75% for loans above ₹5 lakh.
C The bank can sanction up to ₹6 lakh, as LTV is uniformly 75% regardless of loan amount.
D The bank can sanction up to ₹6.40 lakh, as LTV is 80% for the first ₹5 lakh and 75% on the remainder.
E The bank can sanction the full ₹8 lakh as gold is treated as risk-free collateral under RBI norms.
Practice Next

Hey! Ask a query

🎓
Think You're Ready for RBI Grade B?
RBI Grade B 2026 Phase 1 Memory Based Paper
  • 200 Questions with Detailed Solutions
  • Section-wise Coverage (GA, English, Quant & Reasoning)