Mon May 26 10:31:41 UTC 2025: **Summary:**

The Non-Resident Tamils Welfare Board (NRTWB) of the Tamil Nadu government is urging the Union Finance Minister to intervene and request the Reserve Bank of India (RBI) to withdraw or revise its new guidelines on jewel loans. The NRTWB chairperson, Karthikeya Sivasenapathy, argues that the new rules will cause hardship for the general public, especially in rural areas, by pushing them towards private lenders with higher interest rates and undermining trust in public sector banks. He cites concerns over reduced Loan-to-Value (LTV) ratios, stringent documentation requirements, and the potential negative impact on MSMEs and agriculture. He fears the guidelines will hinder financial inclusion and increase rural indebtedness.

**News Article:**

**Tamil Nadu Welfare Board Urges Revision of RBI Jewel Loan Guidelines**

**CHENNAI, May 26, 2025** – The Non-Resident Tamils Welfare Board (NRTWB), under the Tamil Nadu government, has formally requested the Union Finance Minister to intervene in the implementation of new Reserve Bank of India (RBI) guidelines concerning jewel loans, citing potential hardship for the public.

NRTWB Chairperson Karthikeya Sivasenapathy has voiced significant concerns that the revised guidelines will disproportionately affect vulnerable populations, particularly in rural and semi-urban areas. In a letter to the Union Minister, Sivasenapathy argued that the new rules, including reduced Loan-to-Value (LTV) ratios and increased documentation requirements, will drive borrowers to non-banking financial companies (NBFCs) and private lenders, who often charge exorbitant interest rates.

“These measures will undoubtedly push common people toward NBFCs and private financiers, discredit and erode trust in the public sector banking system, and worsen financial exclusion,” stated Sivasenapathy.

The NRTWB fears the guidelines will negatively impact access to credit for critical needs such as education, healthcare, agricultural expenses, and small business financing, potentially hindering financial inclusion efforts across the nation. The board is calling for the RBI to withdraw or significantly revise the guidelines after consulting with state governments, Members of Parliament, and grassroots banking networks. The board is requesting stakeholder consultations on this matter.

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