Overview

• The directions introduce tiered LTV limits of 85% for loans up to ₹2.5 lakh, 80% for ₹2.5–5 lakh and 75% for loans above ₹5 lakh, with interest included in the valuation
• Borrowers may submit self-declarations to establish gold ownership and lenders must return pledged collateral within seven working days of full repayment
• End-use monitoring is mandated only when loans are classified under Priority Sector Lending, reducing paperwork for most small-ticket borrowers
• The Department of Financial Services and stakeholder feedback prompted the RBI to relax its draft norms to safeguard small borrowers and streamline implementation
• Shares of major gold loan NBFCs—including Muthoot Finance, Manappuram Finance and IIFL Finance—jumped up to 7% following the announcement