RBI Chief Malhotra Rules Out Restraints on Gold Loan Rules, Aims to Reassure Borrowers and Lenders

Reserve Bank of India (RBI) Governor Malhotra has made it clear that there is no decision to further stringency in rules for gold loans, bringing comfort to lenders and borrowers in the key segment. Addressing the policy briefing, the Governor reinforced that gold loans are an essential credit channel, especially for semi-urban and rural regions, and the RBI is keenly interested in preserving accessibility and openness in this marketplace.

 

No Gold Loan Rules Tightening:

The RBI Chief said that there is "no tightening on gold loan rules in our mind," ruling out rumors of more stringent regulations in this sector.

The central bank prefers to pursue an even-handed strategy favoring credit flow with assurance of fair play in the gold loan sector.

 

Detailed Guidelines on Gold Loans:

In excluding tightening, the RBI intends to release detailed guidelines for gold loans against collateral so that there can be greater transparency and better risk management.

The guidelines will seek to bring practices uniformly to regulated entities while safeguarding the interests of the borrowers.

 

Significance of Gold Loans:

Gold loans constitute an important avenue of credit for individuals and small enterprises, especially in rural segments where formal credit is not easily available.

The segment has seen consistent growth because of the fast disbursal process and better asset quality.

 

Market Background:

India ranks among the most significant markets for gold loans with an estimated size of over ₹4 lakh crore. The accommodating stance of RBI is likely to further support the segment.

 

Leadership Analysis:

RBI Governor Malhotra said: "Gold loans are a critical tool for extending accessible credit to crores of people. We will ensure that they remain available without subjecting them to unnecessary shackles."

 

Conclusion:

RBI's promise is expected to support growth in the gold loan segment while establishing confidence among lenders and borrowers.

The RBI's assurance on gold loan regulations highlights its determination to create a facilitatory regulatory framework, which is geared towards accessibility with systemic stability.

 

Source: Economic Times; April 9, 2025.