RBI Policy
Gold loan norms by Mon, to help regulate sector well - Malhotra
This story was originally published at 15:15 IST on 6 June 2025
Register to read our real-time news.Informist, Friday, Jun. 6, 2025
Please click here to read all liners published on this story
--RBI Malhotra: Regulations on gold loans were draft, not final
--RBI Malhotra: New regulations will be after consultation, impact study
--RBI Malhotra: There was nothing new in draft gold loan norms
--RBI Malhotra: Draft gold loan norms reiterated existing rules
--RBI Malhotra: Some regulated entities weren't following gold loan norms
--RBI Malhotra: To release final gold loan norms by Mon
--RBI Malhotra: Declaration of ownership will suffice for gold loans
--RBI Malhotra: Don't need credit appraisal for gold loans up to INR 250,000
--RBI Malhotra: Loan to value ratio will be 85% for small loans
--RBI Malhotra: NBFCs, small banks were giving loans up to 88% of gold value
--RBI Malhotra: New gold loan norms will make such loans safer
--RBI Malhotra: Hope final gold loan norms will help us regulate sector well
MUMBAI – The Reserve Bank of India will release the final guidelines on gold loans likely by Monday, with an aim to regulate the sector more effectively, Governor Sanjay Malhotra said while announcing the central bank's second bi-monthly monetary policy for 2025-26 (Apr-Mar). "We hope the final gold loan norms will help us regulate the sector well and new regulations will be framed after consultation and impact study," Malhotra said. "New gold loan norms will make such loans safe." The draft released in April on gold loan norms were not final and merely reiterated existing rules, he addded.
According to the draft guidelines issued by the RBI in April, the maximum loan-to-value ratio in respect of gold loans should not exceed 75% of the value of gold and the ceiling of 75% will apply to all gold loans sanctioned by non-bank finance companies, irrespective of the purpose for which the loan has been sanctioned. Loan-to-value ratio means the ratio of the outstanding loan amount, including any accrued and unrealised interest, to the value of the collateral security on a reference date.
Further, the RBI governor said that some regulated entities were not adhering to gold loan norms, which necessitated the introduction of the new guidelines. Malhotra highlighted that some non-banking financial companies and small banks were lending up to 88% of the gold value. "Declaration of ownership will suffice for gold loans, and credit appraisal will not be required for gold loans up to INR 250,000," Malhotra said. Further, he said that now loan-to-value ratio will be 85% for small loans up to INR 250,000 per borrower, which will include both interest and principal.
Under the earlier proposed regulations, lenders must refrain from providing loans when the ownership of the collateral is uncertain. If the original gold purchase receipts are not accessible, a document from the borrower must be created that clarifies how the ownership of the collateral has been established, which bankers indicate is difficult to accomplish. End
Reported by Vaishali Tyagi
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
