A gold pledge transaction in progress in Kochi city. File photo | Photo Credit: Hindu
RBI Governor Sanjay Malhotra said on Friday that the Reserve Bank of India (RBI) has decided to increase the price (LTV) amount for small gold loans of up to 2.5 lakhs from a borrower from 75% to 85%.
He said that the final directions on the loans given against gold would be released on Friday or Monday as collateral.
“First there was only one draft in the direction, it was not final. The draft is nothing new in the direction, it is a consolidation of previous rules and we have rebuilt it. It was observed that some regulated institutions (RES) were not implementing it because it lacked clarity. Because now everything is in black and white, that is why we are commenting,” Gavarner said.
He said that the draft makes it clear that in the absence of the challan, anyone could give self-proclaimed and there was no need to worry in that front. He said that more clarity will be provided in the last direction and when it is published, he said.
He said, “On credit assessment, this will not apply to small loans up to Rs 2.5 lakh if the gold is promised. Final use will be monitored only when the profit is being taken under priority area lending,” he clarified. He said that the LTV formula will apply to consumption loans and not to others. “Today LTV is 75%. We have increased it by 85% for small loans, including interest for loans below Rs 2.5 lakh per borrowing,” he said.
Published – 07 June, 2025 09:01 am IST
