Play all audios:
The Department of Financial Services has advised the Reserve Bank of India to ensure that the requirements of the small gold loan borrowers are not adversely affected while finalising its
directions on Lending Against Gold Collateral, a release from the DFS said Friday. The suggestion from the DFS has come after the Lending Against Gold Collateral issued by the RBI has been
examined by the Department of Financial Services under the guidance of Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, it said. Advertisement The Reserve Bank of India
has recently issued draft guidelines outlining the procedures for banks and non-banking financial companies to issue gold loans to individuals. Advertisement The draft guidelines seek to
establish uniform rules and regulations for getting gold loans from banks and NBFCs. However, the draft rules imposed some restrictions regarding the type of gold that is eligible as
collateral, the maximum loan amount a bank or NBFC can extend, and various payment rules. The new RBI draft proposes to cap the Loan-to-Value ratio at 75 per cent for all lenders (both banks
and NBFCs). This means that if a gold jewellery is put with a collateral value of Rs 100, then the lender can only give a maximum loan amount of Rs 75. “Draft Directions on Lending Against
Gold Collateral issued by the RBI have been examined by DFS India under the guidance of Union Minister for Finance and Corporate Affairs Smt. @nsitharaman,” the release said in a post on
platform X. It added that the DFS India has given suggestions to the RBI to ensure that the requirements of the small gold loan borrowers are not adversely affected. The DFS has also stated
that such guidelines will need time to implement at the field level and hence may be suitable for implementation from 1st January 2026 only. Further, the DFS has suggested that small ticket
borrowers below Rs 2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans for such small ticket borrowers. Advertisement