To curb the misuse of gold loans, the new rules proposed by the Reserve Bank of India will come into effect from January 1, 2026. The Union Finance Ministry has sent its recommendations to the RBI in this regard. In its recommendations, it has asked to ensure that no problem is created for those taking small gold loans.

The ministry has also recommended keeping gold loans less than Rs 2 lakh out of the proposed guidelines so that such people can get the loan amount in a short time. The Finance Ministry said it is expected that the RBI will issue the final guidelines keeping in mind the feedback of all stakeholders and the public.

What does RBI's gold loan draft say

RBI had issued a draft related to gold loans in April and sought suggestions from stakeholders on it by May 12. The proposed guidelines said that the loan-to-value (LTV) ratio on gold loans should not exceed 75%. That is, the loan amount should not exceed 75% of the value of the gold to be pledged.

This loan-to-value limit will apply to all gold loans given by non-banking financial companies (NBFCs), irrespective of the purpose of the loan. In the case of bullet repayment loans (lump sum repayment), the LTV ratio will be calculated based on the total amount payable on maturity of the loan.

Gold loan limit per customer

In the draft issued by the RBI, it was said that a customer will now be able to take a loan against a maximum of one kilogram of jewelry. This rule will apply to both gold and silver. If you are taking a loan against a gold coin, then the coin should be at least 22 carats and purchased from a bank. Gold loans will not be given on gold coins purchased from other places.

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According to the draft, a customer will be able to take a loan against a maximum of 50 grams of gold coin. In the case of silver, a limit of 500 grams per customer has been fixed. It will be mandatory to return the pledged gold within a maximum of seven days of paying the loan in full. If this is not done, the financial institution will impose a penalty of Rs 5000 per day on the customer.