Congress MP Urges Reconsideration of RBI Jewel Loan Policies

Congress MP Manickam Tagore has appealed to Finance Minister Nirmala Sitharaman to reassess RBI's new jewel loan repayment policies, which now require full repayment of the principal and interest, rather than just the interest. This change may adversely affect small businesses, farmers, and low-income individuals in need of urgent funds.

Congress MP Manickam Tagore has formally addressed Finance Minister Nirmala Sitharaman, seeking urgent intervention over new policy shifts by the Reserve Bank of India (RBI) concerning jewel loans. Tagore criticizes these adjustments, asserting they may severely impact vulnerable communities, including small businesses, farmers, and low-income families.

The updated RBI policy mandates customers repay both the principal and the interest upon loan maturity, contrasting with the previous system that permitted interest-only payments during the loan period. According to Tagore, this change threatens financial stability for many, exacerbating hardships for those reliant on these loans for immediate financial relief.

Tagore's appeal highlights a potential cycle of debt and distress for borrowers, urging the finance minister to persuade the RBI to reinstate the former system. He contends that the prior interest-only repayment option, allowing for loan renewals, offered crucial flexibility, ensuring access to emergency funds for those in dire need.

(With inputs from agencies.)