Gems & Jewellery News

Gold loan companies stop issuing ₹2,000 notes

Leading gold loan companies including Muthoot FinCorp and Indel Money said they have stopped issuing ₹2,000 banknotes to their customers even though the note will remain a legal tender till September 30, 2023.

These non-banking financial companies (NBFCs) said they continue to accept ₹2,000 notes, but are seeking KYC (know your customer) details as and when required.

“We do not want to put our customers in trouble and that is why we have stopped disbursing ₹2,000 banknotes against gold,” said Thomas George Muthoot, director at Muthoot FinCorp.

Short-term gold loans of three months have many takers during this time of the year as farmers buy agricultural inputs for upcoming Kharif season and parents avail them for school or college admission of their children. “Gold loan scores over any other loans per se and education loans in particular on two aspects – no credit history requirement and no end-use restriction,” said Umesh Mohanan, CEO of Indel Money, an NBFC with operations across South India and Maharashtra. These firms continue to accept ₹2,000 notes when borrowers come to repay. However, they have not seen a sudden spike in ₹2,000 note deposits.

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