RBI on Gold Loan: The Reserve Bank of India (RBI) has announced a major relief for gold loan borrowers.
The loan-to-value (LTV) ratio for gold loans up to ₹2.5 lakh has been raised from 75% to 85%. This means you can now get a bigger loan amount against your gold.
1 / 7 – Final Rules for Gold Loans to Be Released
In response to a question on Zee Business, RBI Governor Sanjay Malhotra said that the final rules for gold loans will be released either today or by Monday.
2 / 7 – No Credit Appraisal Needed for Small Loans
The RBI Governor also said that gold loans up to ₹2.5 lakh will not require a credit appraisal. The LTV for these small gold loans has been increased to 85%, up from 75%.
For instance, earlier if your gold was worth ₹1 lakh, you could get a loan of up to ₹75,000. Now, you can get up to ₹85,000.
3 / 7 – Who Will Benefit
This move will help people who take loans by pledging gold. They will get a higher loan amount and need fewer documents.
This change applies to all types of gold loans offered by NBFCs. However, loans will not be given on jewellery if ownership is not verified.
4 / 7 – Easier Access to Loans
This RBI decision will make it easier for people, especially small borrowers, to get loans and improve cash availability. It is expected to boost lending in rural areas.
5 / 7 – Relief for Small Loan Borrowers
Earlier in May, the Department of Financial Services (DFS) under the Finance Ministry had asked the RBI to relax rules for loans up to ₹2 lakh and delay the enforcement of new norms until January 1, 2026.
6 / 7 – Gold Loan Stocks Rise Up to 8%
After the RBI’s announcement, shares of gold loan companies surged. Muthoot Finance rose by 7%, while Manappuram Finance and IIFL Finance shares increased by more than 5%.
7 / 7 – L&T FIN to Enter Gold Loan Market
Currently, over 90% of Muthoot Finance’s total assets under management (AUM) come from gold loans. For Manappuram Finance, gold loans make up over 51.4% of its AUM.
Now, L&T FIN is set to enter the gold loan market by purchasing PMFL’s gold loan business for ₹537 crore.
