Overview

• The RBI will raise loan-to-value ratios to 85% for loans under ₹2.5 lakh, 80% for ₹2.5–5 lakh and 75% for loans above ₹5 lakh effective April 1, 2026.
• Credit appraisals for consumption loans above $3,000 and all income-generating loans must shift from collateral valuations to cash flow–based assessments.
• S&P Global Ratings warns that lenders lacking operational agility and service excellence will struggle in the evolving gold loan sector.
• Non-bank finance companies must bolster risk management frameworks and train loan officers to evaluate borrower repayment capabilities.
• Institutions are expected to pivot toward shorter-tenor products with three- and six-month maturities to offer larger upfront disbursements to low- and middle-income borrowers.