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RBI to Raise Gold Lending LTV to 85% for Loans Under ₹2.5 Lakh: Malhotra

  • On Friday, June 6, 2025, the Reserve Bank of India raised the maximum allowable borrowing against gold collateral to 85% of the asset's value for loans below ₹2.5 lakh.
  • This change follows draft guidelines issued in April 2025 with a 75% LTV and requests from the Department of Financial Services to protect small gold loan borrowers.
  • Gold loan outstanding surged 76.9% year-on-year to ₹1.78 lakh crore by January 2025, while gold loan NPAs rose 28.58%, reaching ₹6,824 crore in December 2024.
  • RBI Governor Sanjay Malhotra said the LTV now includes interest, applies throughout the loan tenor, and credit appraisal is waived for loans up to ₹2.5 lakh secured by gold.
  • The RBI requires compliance with the new norms by April 1, 2026, aiming to regulate gold lending with minimum risk and clarity on collateral ownership.
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Zee Business broke the news in India on Friday, June 6, 2025.
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