Gold Loan New Guidelines: RBI to Soon Issue New Rules for Gold Loans, Relief for Borrowers Up to ₹2 Lakh
The Reserve Bank of India (RBI) may soon provide relief to millions of small borrowers who take out gold loans. The Finance Ministry has requested the RBI to exempt borrowers taking loans up to ₹2 lakh from the upcoming new guidelines on gold loans.
According to a post by the Finance Minister on X (formerly Twitter), the RBI is preparing to implement new regulations, which were recently reviewed under the leadership of Finance Minister Nirmala Sitharaman. The government emphasized that small borrowers such as farmers, small traders, or individuals relying on gold loans for basic needs should not be adversely affected by stringent rules.
Proposal for Relief on Loans Up to ₹2 Lakh
The government has proposed that gold loans up to ₹2 lakh be excluded from the new rules. This is expected to make it easier and quicker for small borrowers to access loans. The ministry also suggested that the new regulations come into effect from January 1, 2026, to give banks and Non-Banking Financial Companies (NBFCs) sufficient time to prepare.
These rules will apply to all banks, cooperative banks, and NBFCs. The RBI is currently seeking feedback from various stakeholders, and final decisions will be made after reviewing these suggestions.
Meanwhile, the RBI has clarified that loans will no longer be given against raw gold or gold biscuits.
What Will the New Rules Include?
The upcoming guidelines are expected to include:
- Clear methods for assessing the purity of gold
- Limiting the Loan-to-Value (LTV) ratio to 75%
- Setting a maximum tenure of 12 months for most bullet repayment loans
These regulations aim to enhance transparency, reduce risk, and protect borrowers, especially those from vulnerable segments. The government and RBI are aligned in their focus on ensuring that such borrowers are not adversely impacted by the changes.
