RBI Proposes 9 Key Reforms in Draft Guidelines for Gold Loan Regulations.

Banking & Finance

In May 2025, the Reserve Bank of India (RBI) released draft guidelines aimed at standardizing the process for issuing gold loans by banks and Non-Banking Financial Companies (NBFCs) to individual borrowers.


      - The proposed guidelines focus on creating uniform rules and procedures to ensure greater transparency and risk management in the gold loan segment.

      - RBI proposes allowing only specific forms of gold as collateral and capping the loan-to-value ratio to prevent over-lending.

      - Mandatory gold valuation procedures, proper documentation, and recordkeeping will be enforced to ensure transparency and borrower protection.

Main Point :-   (i) Key Proposals from RBI’s Draft Guidelines on Gold Loans (May 2025): Borrowers can avail loans up to 75% of the gold’s value, compared to the earlier 80% limit allowed temporarily during the COVID-19 pandemic.

      (ii) Borrowers must provide valid proof of ownership for the gold pledged. In absence of original purchase receipts, a declaration explaining the ownership source must be submitted.

(iii) Lenders must ensure proper documentation and verification of ownership, improving transparency and accountability in the gold loan process.
About RBI

Governor : Sanjay Malhotra
Headquarter : Mumbai
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