“Even if the RBI’s draft guidelines are notified for enforcement at a later stage, it won’t be applicable to PACCS. Additionally, other guidelines, including those restricting maximum tenure of gold loans above Rs 2 lakh to 12 months, do not apply to PACCS,” said an official.

According to the RBI guidelines, loans exceeding Rs 2 lakh must be repaid in equated monthly instalments (EMIs) over a 12-month period, covering both principal and interest.

PACCS provide crop loans for a range of crops, determined by the extent of cultivation and the scale of finance approved by the State Level Technical Committee. These loans are offered without collateral for amounts up to Rs 2 lakh and with collateral for amounts up to Rs 3 lakh. Crop loans cover cash and input costs, including fertilisers, pesticides, and seeds.

Currently, 933 branches of 23 central cooperative banks and 55 branches of the Tamil Nadu State Apex Cooperative Bank fall under RBI regulations and should comply with the new gold loan guidelines.

Gold loans account for 65% of total loans issued by cooperative banks, with nearly 60% of those loans being above Rs 2 lakh, as per the official data.

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