Gold Loans Just Got Bigger! RBI’s 85% LTV(Loan-to-Value) Rule Reshapes Lending Norms

The Reserve Bank of India (RBI) has announced a major policy shift, increasing the LoantoValue (LTV) ratio for gold loans up to ₹2.5 lakh from 75% to 85%. This move aims to ease liquidity constraints for small borrowers, particularly in rural and semiurban areas, where gold loans serve as a key financial lifeline.

 

Key Highlights:

With this progressive reform, the RBI aims to enhance financial inclusion, ensuring greater access to formal credit while reducing reliance on unregulated lenders.

 

Sources: Business World, Financial Express, The Hindu