Union Bank of India cuts lending rates
These changes include downward revision of External Benchmark Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR) by 50 basis points.
'With this move, Union Bank of India has completely aligned its EBLR and RLLR with the recent RBI rate cut which will be beneficial to new and existing Retail (Home, Vehicle, Personal, etc.) and MSME borrowers,' the bank said in a statement.
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The Print
27 minutes ago
- The Print
RBI's new gold loan guidelines could push borrowers back to moneylenders
Gold loans have traditionally been an important financial lifeline for families, particularly in times of adversity. From financing healthcare and education to meeting farming expenditures or fulfilling short-term liquidity gaps, pledging gold is usually quicker, more convenient, and accessible than taking unsecured loans or going through elaborate banking formalities. Their pull comes from less documentation, faster disbursals, and lower interest rates than unsecured credit. Indian families collectively own approximately 25,000 tonnes of gold , which makes India the largest private holder of gold in the world. For perspective, this is almost six times larger than the gold inventory held at Fort Knox in the US, one of the world's most heavily fortified gold reserves. This massive private accumulation is not simply wealth—it is emotion, tradition, and socio-economic resilience. In India, gold is not merely a commodity or a financial asset—it is an intrinsic part of the nation's cultural fabric. For centuries, families across socio-economic backgrounds have relied on gold not just for adornment or investment, but as a form of generational wealth and financial security. This deeply embedded relationship makes gold loans one of the most accessible, viable, and reliable forms of credit in India. But this much-needed safeguard is now under threat from the Reserve Bank of India's (RBI) new guidelines made public in mid-2025. Though intended to curb fraud and impose due diligence, the new norms direct lenders to refrain from extending gold loans where the ownership of collateral is doubtful and mandate formal evidence of gold ownership or a documented verification of such ownership which is a difficult requirement to fulfill in a nation where so much gold passes from one generation to the next or is transferred as gifts without paperwork. The guidelines also have more stringent loan-to-value ratios—maximising loans to 85 per cent of gold value for loans up to Rs 2.5 lakh, 80 per cent for Rs 2.5–5 lakh, and 75 per cent beyond that, covering interest and charges within these ceilings, essentially cutting the effective disbursed loan. Additionally, borrowers are now required to completely repay ongoing gold loans before taking new loans, closing the earlier system of perpetuating loans by remitting interest alone. Lenders also have to evaluate borrowers' earnings and capacity to repay, thus disadvantaging informal workers with no formal evidence of income. Other requirements constrain types of collateral, such as limiting jewellery pledges to 1 kg and gold coins to 50 grams, as well as precluding gold Exchange Traded Funds (ETFs) and mutual funds as collateral. The issue is serious enough to warrant a parliamentary intervention, which I raised during my Zero Hour speech in the Budget Session on 27 March. Also read: Ambitious PMFBY is failing. It has the same flaws of earlier schemes Call for compassionate reform The new requirements fail to account for how gold ownership works in Indian society. It's often undocumented, inherited, and deeply personal. The following real-life stories reveal their unintended consequences: In Kadapa district of Andhra Pradesh, K. Nagalakshmi, a marginal farmer's wife, pawned her gold bangles gifted to her at her wedding 18 years ago to raise Rs 2 lakh for her husband's emergency surgery after a tractor accident. The gold had no receipts; it was part of her dowry, passed from her mother. 'I don't have any paper to prove it's mine,' she told The Hindu. 'These bangles saved my husband's life. If the bank asks for proof next time, what will I do?' During the COVID-19 lockdown, Raju Singh, a pushcart vegetable vendor in Bihar's Muzaffarpur, pledged his wife's earrings to get a Rs 40,000 gold loan from a local lender. With no steady income proof or gold purchase bill, he used the money to buy fresh stock and restart his business. In many Indian households, gold is not purchased with formal receipts. It is gifted at weddings, handed down through generations, or acquired long ago, often before digitisation or widespread receipt culture. The assumption that all borrowers can produce formal documentation is detached from the ground reality and culturally tone-deaf. The rules may inadvertently displace legitimate borrowers, especially women, rural households, informal workers, and the elderly. In seeking to curb fraud, we risk pushing people away from formal credit systems and back into the arms of exploitative moneylenders. While regulatory oversight is essential, it must be coupled with cultural awareness and practical flexibility. Gold loans are more than just financial instruments—they are the bridge between India's cultural legacy and modern financial needs. RBI must look beyond spreadsheets and balance sheets to understand how Indians live with gold—as tradition, as trust, and as a fallback in times of need. Regulation must serve both the integrity of the financial system and the dignity of its users. Only then can we preserve the value of gold as a source of security, not just in monetary terms but in the cultural heart of Indian life. Karti P Chidambaram is a Member of Parliament for Sivaganga, and a Member of the All India Congress Committee. His X handle is @KartiPC. Views are personal. (Edited by Ratan Priya)
Mint
30 minutes ago
- Mint
Expert view: Nifty EPS may grow at a 13% CAGR over FY25–FY27, says Anil Rego of Right Horizons PMS
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While some sectors are poised to outperform, others are likely to face lingering challenges, suggesting that the worst may be behind us selectively, not uniformly. Banking sector: Banks are expected to report muted earnings growth due to margin compression from the RBI's recent repo rate cuts, seasonally weak fee income, and elevated credit costs, particularly in unsecured and agri loan segments. However, the outlook improves from the second half of the financial year (H2FY26), with expectations of improved loan growth, easing deposit costs, and declining slippages. IT sector: The IT sector is likely to report mixed revenue growth. Tier-1 IT companies may post flat to marginally negative constant-currency (CC) growth, with only a few companies expected to grow sequentially. Mid-tier firms are expected to do relatively better, driven by strength in BFSI, healthcare, and GenAI-led demand. The sector's deal pipeline remains healthy, and margin guidance is stable, indicating resilience despite macro headwinds. The market outlook supports a selective sectoral approach, focusing on areas with strong earnings visibility, structural tailwinds, and valuation comfort. Financials (banks & NBFCs) Banks remain structurally positive, with asset quality stabilising and credit demand holding up. Margins may have peaked, but lower funding costs from RBI rate cuts should aid profitability from H2FY26. NBFCs, especially in retail lending, gold loans, and vehicle finance, are expected to benefit from improved liquidity and demand recovery. Funding diversification and strong disbursement momentum support their outlook. Public and private capex revival, strong order books, and government focus on infrastructure make this sector attractive. Execution momentum is visible across electrification, construction equipment, and engineering segments, backed by rising investments and policy incentives. A structural growth story driven by indigenous procurement (92 per cent of contracts awarded to Indian firms), record exports, and rising capex allocation. Private players are gaining traction alongside DPSUs, supported by a ₹ 40,000 crore emergency procurement push. Hospitals are showing robust growth in profitability, ARPOB, and occupancy rates. Expansion into tier-2 cities and the medical tourism potential offer multi-year tailwinds. Diagnostics and digital health initiatives continue to support earnings resilience. Urban consumption remains healthy, aided by premiumisation and easing input costs. Value fashion, QSRs, electronics, and jewellery segments are doing well. Tax relief and rural revival could further aid demand in H2FY26. 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As of June 2025, key indices like the Sensex are trading at nearly 24.7 times trailing PE and nearly 3.7 times P/B, which are above their 10-year averages. This elevated valuation comes after a sharp June rally driven by the RBI's front-loaded rate cuts, falling crude prices, and foreign inflows. In this context, a prudent equity investment strategy would involve: Bottom-up stock selection: Focus on fundamentally strong companies with stable earnings visibility, robust cash flows, and sectoral tailwinds, particularly in financials, manufacturing, healthcare, and select midcap IT. Maintain valuation discipline: Avoid chasing momentum in overvalued stocks or sectors. Seek opportunities where growth is not fully priced in, especially in sectors benefiting from reforms, PLI, or rising domestic demand. Diversify across market caps: While large caps offer safety in uncertain times, select mid and small caps with solid fundamentals and reasonable valuations can provide alpha as the cycle broadens. Use volatility to build exposure: Geopolitical risks, global rate uncertainty, and election-driven policies may trigger short-term corrections. These should be used to accumulate quality names rather than exiting in panic. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Mint
an hour ago
- Mint
Is gifting money to my NRI son's NRO account taxable?
My son is an NRI and wants to invest in a foreign exchange-traded fund (ETF). Right now, he doesn't have enough money in his NRO account. I'm planning to gift him the required amount by transferring it to his NRO account. I want to know if there will be any tax implications for either of us because of this gift? Under Indian tax law, any gift made to a 'relative' is fully exempt from income tax, regardless of the amount. Since your son qualifies as a relative, your transfer of funds to his NRO account as a gift will not trigger any tax liability—neither for you nor your son. As per the Reserve Bank of India's Liberalised Remittance Scheme (LRS), a resident Indian can remit up to $250,000 per financial year for permitted purposes, including gifts to NRIs into their NRO accounts. While this is essentially a rupee-to-rupee transfer, the LRS includes such gifts in its overall cap. If your total outward remittance under LRS exceeds ₹ 10 lakh in a financial year, then Tax Collected at Source (TCS) at 20% applies on the excess amount. The remitting bank (authorised dealer) is mandated to deduct this TCS at the time of remittance—even for rupee gifts into NRO accounts, though in practice, some banks may not do so. If TCS is collected, you may adjust it against your income tax liability or claim a refund while filing your return. Once your son receives the funds in his NRO account, he can repatriate the amount to his overseas bank account under the $1 million remittance facility, subject to documentation. This will typically require a Form 15CB certificate from a Chartered Accountant, as required by the bank processing the repatriation. To avoid any future tax scrutiny, it's advisable to execute a formal gift deed or gift declaration letter, documenting the transfer as a bona fide gift. Finally, any income your son earns from investing the funds in foreign ETFs will not be taxable in India, since he's an NRI and such income accrues outside India. Harshal Bhuta is partner at P. R. Bhuta & Co. CAs
