Borrowers with gold loans up to ₹ 2 lakh should take note, they may be excluded from RBI's proposed rules

Borrowers taking gold loans up to Rs 2 lakh may be excluded from the RBI's proposed rules. The Finance Ministry said, we have examined the central bank's draft guidelines on gold loans and have suggested keeping these small borrowers out of it. The Reserve Bank of India (RBI) issued draft guidelines on gold loans on 9 April. It has been suggested that the guarantee be improved and that the loan be used properly. It was also proposed that the loan value ratio of all loans classified against gold will not exceed 75% of the value of gold.

The Finance Ministry said that, RBI's draft instructions have been examined by the Department of Financial Services (DFS). DFS has given suggestions to the central bank to ensure that the needs of small gold loan borrowers are not adversely affected. Such guidelines will need time to be implemented at the field level. Therefore, it may come into effect from January 1, 2026.

DFS recommended excluding borrowers up to Rs 2 lakh from following these guidelines, to enable them to receive timely and quick loans. RBI is considering the feedback as well. The draft had been opposed by the political parties and farmers' organizations in Tamil Nadu.