This means if the gold pledged is worth ₹1 lakh, borrowers can now get up to ₹85,000 instead of ₹75,000.
The relaxation applies to smaller gold loans, making access to funds easier for households and small businesses.
RBI’s Governor Sanjay Malhotra also announced that credit appraisal requirements will be removed for small-ticket loans, easing procedural burdens on borrowers.
Additionally, end-use monitoring will only be mandated if the loan qualifies under the Priority Sector Lending (PSL) norms.
The new guidelines follow the RBI’s April draft framework on gold loans, released after a joint supervisory review flagged several issues in gold lending by NBFCs.
These included excessive LTV breaches, misuse of third-party agents, non-transparent auction practices, and poor risk controls.
In response, the RBI proposed capping LTV at 75%, limiting bullet payment tenure to 12 months, and setting stricter risk controls on gold loan portfolios.
However, concerns were raised over the impact of these rules on small borrowers. In May, the Department of Financial Services (DFS) under the Ministry of Finance urged the RBI to exempt loans under ₹2 lakh from the tighter norms and delay implementation until January 1, 2026.
The RBI appears to have partly addressed these concerns through Friday’s announcement.
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