Gold loan companies stop issuing Rs 2,000 notes

26 May 2023 , 11:43 AM

Despite the fact that the note would continue to be valid till September 30, 2023, prominent gold lending businesses such as Muthoot FinCorp and Indel Money announced they have stopped issuing Rs 2,000 banknotes to their clients.

These non-banking financial institutions (NBFIs) stated that they continue to accept notes in the amount of 2,000 but will request KYC (know your customer) information as and when necessary.

According to Thomas George Muthoot, director of Muthoot FinCorp, who talked to ET, ‘We do not want to put our customers in trouble and that is why we have stopped disbursing Rs 2,000 banknotes against gold.’

At this time of the year, farmers are purchasing agricultural inputs for the forthcoming Kharif season, and parents are taking out short-term gold loans of three months to pay for their children’s admission to school or college. 

‘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,’ Umesh Mohanan, CEO of Indel Money, an NBFC with operations in South India and Maharashtra, who talked to ET. When clients arrive to pay, many businesses still accept 2,000 notes. They haven’t noticed a sudden increase in 2,000 note deposits, though.

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