- The Reserve Bank of India (RBI) has rolled out detailed guidelines for Lending Against Gold and Silver Collateral, with the goal of creating a more uniform set of rules for gold and silver loans across all regulated entities (REs).
- Under these new guidelines, regulated entities are allowed to provide loans against gold jewelry, ornaments, and coins to help borrowers with their short-term financial needs.
- However, lending against primary gold forms like bullion is restricted to prevent speculative activities.
- This approach has led to some regulatory inconsistencies due to the varying mandates and risk appetites of different REs.
- Scope and Applicability: These guidelines apply to all commercial banks (except Payments Banks), primary (urban) and rural cooperative banks, as well as all Non-Banking Financial Companies (NBFCs), including Housing Finance Companies (HFCs).
The Reserve Bank of India (RBI) has rolled out detailed guidelines for Lending Against Gold and Silver Collateral, with the goal of creating a more uniform set of rules for gold and silver loans across all regulated entities (REs).
Under these new guidelines, regulated entities are allowed to provide loans against gold jewelry, ornaments, and coins to help borrowers with their short-term financial needs. However, lending against primary gold forms like bullion is restricted to prevent speculative activities. This approach has led to some regulatory inconsistencies due to the varying mandates and risk appetites of different REs.
Scope and Applicability: These guidelines apply to all commercial banks (except Payments Banks), primary (urban) and rural cooperative banks, as well as all Non-Banking Financial Companies (NBFCs), including Housing Finance Companies (HFCs). They encompass loans intended for both consumption and income generation, provided that the gold or silver collateral meets eligibility criteria. These new guidelines will take effect no later than April 1, 2026.
Link : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12859&Mode=0