The Reserve Bank of India (RBI) is tightening gold loan norms due to the surge in gold prices and a rise in unpaid gold loans (NPAs). Gold loans are popular in India for quick cash, but many borrowers have defaulted, affecting both banks and NBFCs. NPAs from gold loans rose sharply in 2024—₹2,040 crore for banks and ₹4,784 crore for NBFCs.
After concerns from Tamil Nadu CM MK Stalin, the Finance Ministry suggested that loans below ₹2 lakh be exempt from the stricter rules. It also proposed that the new rules apply from January 1, 2026, to give lenders time to adjust.
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The RBI's draft gold loan rules aim to reduce risk for lenders and borrowers, improve transparency, and prevent misuse. While helpful for the financial system, the stricter rules could hurt small borrowers, prompting the government to recommend a ₹2 lakh exemption. If approved, the new norms will apply from January 2026.
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Published on: Jun 3, 2025, 11:38 AM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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