The Reserve Bank of India (RBI) has determined to improve the loan to worth (LTV) quantity for small gold loans of up to ₹2.5 lakh from one borrower from 75% to 85% together with curiosity, RBI Governor Sanjay Malhotra stated on Friday.
He stated the ultimate instructions on loans given in opposition to gold as collateral can be issued on Friday or on Monday.
“First of all the direction was only a draft, it was not final. There is nothing new in the draft direction, it is a consolidation of past regulations and we have recreated it. It was observed that some regulated entities (REs) were not implementing it because it lacked clarity. Because now everything is in black and white, that is why we have been getting comments,” the governor stated.
He stated the draft makes it clear that on the absence of bill, one may give a self-declaration and there was no want to fear in that entrance. More readability will probably be supplied on the ultimate route as and when it’s printed, he stated.
“On credit appraisal, it will not be applicable for small loans of upto Rs 2.5 lakh if gold is pledged. End use will only be monitored if benefit is being taken under priority sector lending,” he clarified.
He stated the LTV formulation will probably be relevant on consumption loans and never on others.
“Today LTV is 75%. For small loans we have increased it to 85% including interest for loans below Rs 2.5 lakh per borrower,” he stated.
Published – June 07, 2025 09:01 am IST
