Tamil Nadu Chief Minister E Palaniswami on Friday declared a gold loan waiver just hours before the announcement of state election dates, which will bring a model code of conduct into place.
Gold loans against up to six sovereigns given by cooperative banks to farmers and the poor will be waived, the Tamil Nadu government announced.
Justifying the move, Palaniswami said the economy was yet to recover from the Covid-19 pandemic and this would help the poor redeem the gold they had pledged during the lockdown.
The gold loan schemes with low-interest rates were offered by the Tamil Nadu State Apex Co-operative bank as part of Covid relief measures. The interest rate has been fixed at 6% a year. In this, people could get ₹25,000 to ₹1,00,000 and the loan has to be returned in three months.