RBI To Issue New Gold Loan Norms

Mumbai: RBI Governor Sanjay Malhotra announced on Wednesday that it has been decided to issue comprehensive regulations on prudential norms and conduct-related aspects for gold loans following concerns raised over the issue.

The review of guidelines for lending against the collateral of gold jewellery and ornaments are extended by regulated entities (REs) for both consumption and income-generation purposes.

“Prudential and conduct-related regulations for such loans have been issued from time to time, and they vary for different categories of REs. With a view to harmonizing such regulations across REs while keeping in view their risk-taking capabilities and also to address a few concerns that have been observed, it has been decided to issue comprehensive regulations on prudential norms and conduct-related aspects for such loans,” Malhotra said.

The draft guidelines in this regard are being issued for public comment.

Shares of Muthoot Finance, IIFL Finance, Manappuram Finance, Cholamandalam Investment and Fin Co fell up to 7 per cent on Wednesday after the announcement.