**Executive Summary**
This document summarizes the response to a parliamentary question regarding the Gold Loan Guidelines issued by the Reserve Bank of India (RBI). The RBI issued draft directions on lending against gold collateral on April 9, 2025, for public comments. The final comprehensive directions were issued on June 6, 2025, incorporating stakeholder feedback and apply to all loans for consumption or income generation.
**Key Points / Main Content**
* **Issuance of Guidelines:**
* RBI issued draft Directions on Lending Against Gold Collateral on April 9, 2025, for public comments.
* Comprehensive Directions on Lending Against Gold and Silver Collateral were issued on June 6, 2025.
* **Scope of Application:**
* The directions apply to all loans offered by Regulated Entities (REs) for consumption or income generation, including farm credit.
* Eligible gold or silver collateral is accepted as security.
* **Salient Features of the Directions:**
* Detailed credit assessment, including borrower repayment capacity assessment, is required for loans above ₹2.5 lakh.
* The maximum loan-to-value ratio must not exceed 85% for loans up to ₹2.5 lakh.
* All communication with the borrower must be in the language of the region or a language chosen by the borrower.
* Renewal of bullet repayment loans is allowed upon payment of accrued interest, if any.
* **Department of Financial Services Request:**
* RBI was requested to consider excluding small-ticket borrowers from the linkage of sanction amount with repayment capacity and proof of ownership requirements.
**Impact Analysis**
**Regulated Entities (REs)**
* **Impact:** Must adhere to the new directions when lending against gold and silver collateral.
* **Action Required:** Update lending practices to comply with requirements for credit assessment, loan-to-value ratios, and borrower communication.
**Borrowers**
* **Impact:** Benefits from standardized lending practices and communication in their preferred language.
* **Action Required:** Be prepared to provide information for detailed credit assessment for loans above ₹2.5 lakh.
**Small-Ticket Borrowers, including farmers**
* **Impact:** May have relaxed requirements related to sanction amounts, repayment capacity assessment, and ownership proof.
* **Action Required:** Should verify with lending institutions if the eased guidelines apply to their specific loan.
Key Entities Referenced
Reserve Bank of India (RBI): Central bank responsible for issuing the Gold Loan Guidelines and related directions.
Gold Loan Guidelines: Draft guidelines issued by RBI regarding lending against gold collateral.
Department of Financial Services: A department within the Ministry of Finance that suggested certain exclusions from the proposed Gold Loan Guidelines.
Ministry of Finance: The ministry under which the Department of Financial Services operates.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 35
ANSWERED ON MONDAY, DECEMBER 1, 2025/ AGRAHAYANA 10, 1947 (SAKA)
Gold Loan Guidelines
35. SHRI BALASHOWRY VALLABHANENI:
Will the Minister of FINANCE be pleased to state:
(a) whether it is true that RBI has recently issued draft Gold Loan Guidelines;
(b) if so, the details thereof;
(c) the details of directions proposed by RBI in the guidelines which are impacting gold loans
taken by small, marginal and small- ticket borrowers;
(d) whether Department of Financial Services suggested RBI that small- ticket borrowers
below Rs. 2 lakhs be excluded from the requirements of the proposed guidelines; and
(e) whether RBI complied with the request made by DFS, if so, the details thereof?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (e): Yes, the draft Directions on Lending Against Gold Collateral had been issued by
Reserve Bank of India (RBI) on 9.4.2025 for public comments.
RBI was requested to consider, inter alia, exclusion of small ticket borrowers, including
farmers, from the then proposed linkage of sanction amount with repayment capacity of
borrower along with necessity of proof of ownership/ relevant document.
RBI has since issued comprehensive Directions on Lending Against Gold and Silver
Collateral on 6.6.2025, taking into consideration comments/ feedback received from various
stakeholders, to create a principle-based harmonized regulatory framework and to address
prudential and conduct-related gaps across all regulated entities (REs) for loans against gold
and silver collateral.
Further, these directions apply to all loans offered by RE for the purpose of consumption or
income generation (including farm credit) where eligible gold or silver collateral is accepted
as a collateral security.
The salient features of the Directions, inter alia, include:
(i) Detailed credit assessment, including assessment of borrower’s repayment
capacity to be undertaken in case the total loan amount is above ₹2.5 lakh to
a borrower;
(ii) Maximum permissible Loan to value ratio not to exceed 85 per cent for
maximum total consumption loan amount of ₹2.5 lakh;
(iii) All communication with the borrower to be in the language of the region or in a
language chosen by the borrower; and
(iv) Renewal of bullet repayment loans on payment of accrued interest, if any.
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