Gold Loan Draft Norms: RBI’s April 2025 Proposals Explained
Why in the news
RBI released draft rules on lending against gold to align banks and NBFCs and fix lapses seen in FY24.
Key facts
| Area | Draft position |
|---|---|
| LTV | 75% cap; interest included for bullet loans |
| Valuation | 22 carat price; ownership proof; uniform purity checks |
| Loan structure | No concurrent consumption and income loans; renewal only if standard and within LTV; fresh loan after full repayment |
| Late return of gold | ₹5,000 per day beyond 7 working days |
Background
- Gold loan books grew over 50% in FY24; bank books alone rose 104%.
Concerns
- Rural and agricultural borrowers lose flexibility; small NBFCs may face funding stress and consolidation.
- Higher compliance costs may push up rates.
- Experts urge differentiated norms for micro gold loans to protect financial inclusion.
Exam angle
- Numbers: 75%, 22 carat, 7 working days, ₹5,000.
- Terms: LTV, bullet loan, DSCR.