Crime Today News
RBI’s new “Lending Against Gold and Silver Collateral Directions, 2025” will significantly benefit small-ticket borrowers as it allows a maximum LTV (loan-to-value) ratio of 85 per cent for loans amount up to ₹2.5 lakh, according to V. P. Nandakumar, Managing Director and CEO, Manappuram Finance Ltd (MFL).
The RBI has capped LTVs at 85 per cent for loans up to ₹2.5 lakh, 80 per cent for loans between ₹2.5 and ₹5 lakh, and 75% for loans above ₹5 lakh. Currently, LTV is capped at 75 per cent for all gold loans, irrespective of the size.
“These thresholds strike a balance between borrower access and systemic stability. We are fully aligned with these stipulations and will implement them rigorously…,,We believe this framework will further bolster public trust in gold loans as a reliable and responsible source of credit,” Nandakumar said in a statement.
He noted that these Directions, which come into effect from April 2026, aim at promoting transparency, ethical practices, and prudential discipline while enhancing financial access for individuals and micro enterprises.
“The standardised assaying process—mandating borrower presence and use of reference prices from the Indian Bullion and Jewellers Association (IBJA) or SEBI-regulated exchanges—will foster uniformity across the industry,” the MFL chief said.
The RBI’s provisions for fair compensation in the event of loss, damage, or delayed return of pledged assets, and its emphasis on disbursing loans directly into verified bank accounts in compliance with KYC and Income Tax Act provisions reflect the regulator’s focus on integrity, accountability, and customer rights, he added.
Under the new guidelines, in the case of bullet repayment loans, RBI has placed a cap of 12 months for such loans, with renewals allowed only upon creditworthiness and interest repayment.
Published on June 7, 2025
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