No need of credit appraisal for gold loans up to Rs 2.5 lakh: RBI Governor

NEW DELHI: The credit appraisal for small ticket loans up to 2.5 lakh Rupees where gold is given as collateral will not be needed, said Sanjay Malhotra, Governor of the Reserve bank of India (RBI).

The RBI Governor said that the regulations on the gold loans were draughted, and final guidelines will be released by Friday evening or at the latest by Monday.

Speaking during the press conference after announcing the outcome of the Monetary Policy Committee (MPC), Governor Malhotra said, “There was nothing new in this (draft) that we have released. We have consolidated and reiterated our old rules. Because it was seen that some regulated entities were not following them. Because there was no clarity in it… whatever the final regulation is, we will release it if not today, then by Monday.”

The statement comes after the government last month asked the RBI to see that the needs of small gold loan borrowers are not affected by the central bank’s proposed new rules on lending against gold as collateral.

The Finance Ministry in a post on social media platform X informed that it has suggested to the central bank that Draft Directions on Lending Against Gold Collateral issued by the RBI have been reviewed by the Department of Financial Services (DFS) under the guidance of Union Finance Minister Nirmala Sitharaman.

The DFS has shared its suggestions with the RBI and requested the central bank to ensure that the new rules do not make it difficult for small borrowers to get gold loans. These borrowers often depend on small-ticket loans to meet urgent personal or business needs.

The finance ministry also said that these new guidelines may require time to be implemented properly at the ground level. Therefore, the DFS has suggested that the RBI implement the new directions from January 1, 2026.

To further protect small borrowers, the ministry has proposed that those taking loans below Rs 2 lakh should be kept out of the new requirements. This, it said, would help ensure faster and smoother disbursal of small gold loans.

The RBI is currently getting feedback from stakeholders on the draft guidelines. The Finance Ministry said that it expects the RBI to carefully consider the concerns raised by various stakeholders and suggestions from the public before finalising the rules.

The Reserve Bank of India draft guidelines to harmonise regulations for loans against gold as collateral will be applicable to banks, cooperative banks, and NBFCs. (ANI)