RBI Tightens Gold Loan Norms Amid Macro-Prudential Concerns

The Reserve Bank of India (RBI) has introduced new restrictions on lending against primary gold and gold bullion, citing broader macro-prudential concerns. The central bank clarified that regulated entities can continue to offer loans against gold jewellery and ornaments, but lending against gold bars, ingots, and bullion will be restricted to curb speculative practices.

The RBI’s Lending Against Gold and Silver Collateral Directions, 2025, aim to harmonize regulations across financial institutions while addressing credit risk and market volatility. The guidelines also propose stricter loan-to-value (LTV) ratios, enhanced collateral verification, and standardized auction procedures for pledged gold.

Industry experts believe these measures will strengthen financial stability, ensuring that gold-backed loans remain focused on productive purposes rather than speculative investments.

Key Highlights:

RBI restricts lending against primary gold and bullion, allowing loans only on jewellery and ornaments.
New guidelines aim to curb speculative lending practices and enhance financial stability.
Loan-to-value (LTV) ratios revised, with stricter collateral verification.
Standardized auction procedures introduced to improve transparency.

Source: RBI Official Notification | Indian Express | Hindu Business Line