Gold Loan Rules: If you or your acquaintances ever take a loan in exchange for gold when needed, then there is an important news for you. The Reserve Bank has made some new rules related to gold loans, but now the Ministry of Finance has raised questions. The ministry feels that these new rules can create difficulties for small borrowers, especially people of villages and poor sections. For this reason, the ministry has asked the RBI to give more time to implement these guidelines and some relief should also be given to those who take small loans.
The Department of Financial Services (DFS) under the Finance Ministry has sent its suggestions to the Reserve Bank of India (RBI) on the draft rules prepared for gold loan. These suggestions are especially made to protect the interests of small loans.
What was said by DFS?
DFS has suggested to RBI that those taking gold loans less than Rs 2 lakh should be exempted from new rules. With this, small farmers, shopkeepers and needy people will get gold loans quickly and easily. This step will give relief to people who mortgages gold for small amounts.
New rules may be applicable from 1 January 2026
Apart from this, DFS has also recommended the RBI that the date for implementing the new rules should be reduced to 1 January 2026. This will give banks and NBFCs enough time to improve their system and implement changes. The Finance Ministry said that these suggestions have been prepared under the guidance of Union Finance Minister Nirmala Sitharaman and sent to RBI.
Why did RBI release new rules?
In April 2025, RBI issued draft rules regarding gold loan. A recent joint review was done in which many irregularities were revealed.
Loose loose monitoring on loan-to-value (LTV) ratio.
Flaws in risk valuation.
Misuse of agents
Not having auction process transparent
To remove these flaws, RBI planned to issue strict guidelines to banks and NBFCs.
Main point of draft rules
The loan amount should not be more than 75% including interest in the entire loan period as compared to the total price of LTV ratio i.e. gold. This can reduce the amount of loan with bullet repayments to 55–60%, which used to be up to 65–68% earlier. EMI-based loans where the principal is repaid quickly, a little more LTV can be found. The quantity of the gold loan should be a fixed part of the total loan portfolio of banks and it will be fixed from time to time.
Now what next?
The RBI has said that the feedback it has received from public and other stakeholders is being reviewed. All suggestions including DFS will be considered and then final rules will be set. This can be a great relief news for small loans takers, if RBI accepts the suggestions of DFS.
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