The Reserve Bank of India on Friday announced doubling the lending limits for gold loans under the bullet repayment scheme for urban cooperative banks to Rs 4 lakh.

• It has been decided to increase the existing limit for gold loans under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023. 
• RBI Governor Shaktikanta Das said. A bullet repayment scheme is one where a borrower repays interest and the principal amount at the end of a loan tenure without worrying about repayment during the loan tenure.
• Das, who had a meeting with the top brass of UCBs recently, said the measure is in line with the RBI’s earlier announcement of providing "suitable incentives" to UCBs that have met the prescribed PSL targets, wherein a lender is mandated to devote a certain part of its overall lending for the marginalised sector.
• Later in the day, the RBI in a circular said, it has been decided to increase the monetary ceiling of gold loans that can be granted under the bullet repayment scheme, from to Rs 4 lakh for those UCBs, who have met the overall Priority Sector Lending target and sub-targets as on March 31, 2023, and continue to meet the targets.