Tamil Nadu Vivasayigal Sangam General Secretary P.S. Masilamani on Monday criticized the Reserve Bank of India’s (RBI) new regulation that mandates banks to ensure gold loans are repaid and closed instead of being renewed or upgraded.
Masilamani argued that the directive disproportionately impacts farmers and the working-class population, urging the Union government to intervene and revoke the regulation. He warned that if the Centre fails to address the issue, a statewide protest would be organized.
The farmer leader accused the RBI of being indifferent to the struggles of farmers, low-income groups, and the middle class. He claimed that the regulation was ill-conceived, as it prevents borrowers from extending their loan terms, thereby increasing the risk of banks auctioning pledged gold in case of non-repayment.
“For years, farmers have relied on gold loans to fund their cultivation after being denied crop loans. This facility has been crucial in supporting their agricultural activities,” Masilamani said. However, he noted that factors such as failed yields and crop damage often force farmers to renew their loans rather than closing them.
Condemning the regulation as a direct attack on farmers, Masilamani urged the RBI to reconsider and withdraw the directive to prevent further hardship for agricultural communities.
Related topics:
Do Gold Futures Trade on Weekends?
