Tamil Nadu Cooperative Banks Raise Gold Loan Limit to Rs.10,000 Per Gram

The Tamil Nadu government has taken steps to increase the maximum loan amount available against gold jewellery through various cooperative institutions functioning under the control of the Registrar of Cooperative Societies.

Under the revised decision, the maximum gold loan amount has been increased to Rs.10,000 per gram or 75% of the market value of the jewellery, whichever is applicable.

Previously, gold loans were provided at up to 75% of the market value of gold, subject to a maximum of Rs.7,000 per gram. For loans with a six-month repayment period, the average monthly market value of gold was considered for calculating the loan amount.

The maximum interest rate on gold loans had also been increased from 12% to 13% last year.

Gold Loan Limit Increased

At an important meeting held on October 5, 2026, key decisions were taken regarding gold loans provided through cooperative institutions.

The loan amount for gold jewellery has now been revised to a maximum of Rs.10,000 per gram or 75% of the market value of the jewellery.

Interest Rate Concession and Revision

A significant difference had existed between the interest rates charged on gold loans provided directly through District Central Cooperative Banks (DCCBs) and those provided through Primary Agricultural Cooperative Credit Societies (PACCS).

To bring uniformity, it has been directed that the interest rate charged by DCCBs to PACCS for JL-CC should be at least 1.25% lower than the interest rate charged for gold loans provided to the public through DCCB branches.

At the same time, the margin of PACCS has been instructed not to exceed 2.25%.

The revised higher loan limit will apply fully to newly sanctioned gold loans as well as existing gold loans that are currently being renewed.