The Reserve Bank of India will issue comprehensive norms for loans against gold jewellery and ornaments, governor Sanjay Malhotra said on April 9.
The central bank has decided to harmonise such regulations across regulated entities while keeping in view their risk-taking capabilities and also to address a few concerns that have been observed, Malhotra said while sharing the outcome of the policy review.
Later responding to a query at the customary press meet, Malhotra said he didn’t say that the norm would be “tightened” and suggested waiting for the guidelines.
The RBI will issue draft guidelines regarding these norms for public comments, the governor said earlier in the day.
Also read: Follow our policy live blog for the latest on the RBI MPC
The RBI's Sectoral Deployment of Bank Credit, released on March 27, showed that credit extended to borrowers against gold jewellery rose sharply in February, coinciding with a record rise in the price of the precious metal.
At the end of the month, the gold loan portfolio at the rose 87.4 percent compared to a growth of 15.2 percent a year ago.
In absolute terms, the outstanding loan against gold jewellery stood at Rs 1.91 lakh crore as on February 21, compared to Rs 1.02 lakh crore as on February 23, 2024, and Rs 89,370 crore as on March 24, 2023, the data showed.
Bank credit to loan against gold jewellery was the fastest growing in the personal loan segment, compared to other components.
The central bank, as expected, cut the key repo rate by 25 basis points second time in a row, bringing it down to 6 percent.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
