Gold loans have long been one of the fastest and easiest ways for Indians to access funds. With rising gold prices and growing demand, the Reserve Bank of India (RBI) has introduced new guidelines for gold loans in 2025 to make the process more transparent, borrower-friendly, and risk-controlled.
In this blog, we break down the key changes and what they mean for both borrowers and lenders.
Key Highlights of RBI’s New Gold Loan Guidelines
1. Tiered Loan-to-Value (LTV) Ratios
Loans up to ₹2.5 lakh → Maximum 85% LTV
Loans between ₹2.5 lakh – ₹5 lakh → Maximum 80% LTV
Loans above ₹5 lakh → Maximum 75% LTV
👉 This ensures small borrowers can access more funds while larger loans remain under stricter control.
2. Mandatory Creditworthiness Check
For loans above ₹2.5 lakh, lenders must now evaluate the borrower’s repayment capacity—not just the value of pledged gold.
3. Standardized Gold Valuation
Uniform methods for purity and weight checks across all branches.
Borrowers receive a certificate of valuation with details of gold purity, gross weight, and deductions.
Greater transparency means no under-valuation of your gold.
4. Borrower Protections in Auctions
If a borrower defaults and the gold is auctioned:
The reserve price must be at least 90% of collateral value.
Any surplus from the auction must be refunded within 7 working days.
If lenders delay returning pledged gold, they must pay compensation.
5. Restrictions on Re-Pledging
Gold already pledged for a loan cannot be re-used for another loan, ensuring better borrower security.
6. End-Use Monitoring of Funds
Borrowers must provide proof of how the loan will be used, especially for higher-value loans. This step prevents misuse and ensures loans are used for genuine needs like business or personal expenses.
What This Means for Borrowers
Easier Access: Small-ticket borrowers (≤ ₹2.5 lakh) get higher LTV and better borrowing power.
Transparency: You’ll know exactly how your gold is valued and what loan terms apply.
Fair Auctions: Better safeguards in case of default.
What This Means for Lenders
Stricter Compliance: More documentation, monitoring, and borrower checks.
Reduced Risk: Controlled exposure to large-ticket loans.
Trust Building: Clear valuation and standard practices improve credibility with customers.
FAQs
Q1: Will my existing gold loan be affected?
No. Existing gold loans continue under old terms. New guidelines apply only to fresh loans or renewals.
Q2: Can I still pledge the same gold for another loan?
No. RBI has banned re-pledging of gold to avoid misuse.
Q3: What if my lender delays returning my gold?
The lender must compensate you, often with a fixed penalty per day of delay.
Q4: Does this mean I’ll get less money for larger gold loans?
Yes. The LTV is capped lower for loans above ₹5 lakh, so you may get slightly less compared to small-ticket loans.
Final Thoughts
The RBI’s new gold loan guidelines are designed to balance borrower convenience with financial discipline. If you’re planning to take a gold loan, these changes give you more security, fair valuation, and transparent terms. For lenders, it means adopting better risk practices while continuing to serve a growing demand.
Published on :2nd September
Published by : SMITA
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