The Reserve Bank of India (RBI) has been working on regulating the gold loan industry, introducing new guidelines to ensure transparency and fairness in lending practices. Recently, the RBI proposed draft norms for gold loans, outlining standardised procedures for determining gold purity, weight, and valuation. These guidelines emphasise the importance of clear documentation, auction procedures, and borrower communication.
Key developments for gold loans from the RBI guidelines include focusing on borrower protection and transparency. The Loan-to-Value (LTV) ratio is capped at 75 percent for most gold loans, but smaller loans up to Rs 2.5 lakh have a higher LTV of 85 percent, allowing borrowers to access more funds.
Additionally, lenders are required to obtain proof of ownership from borrowers and issue a gold purity certificate to ensure authenticity. The RBI has also standardised auction procedures, mandating a minimum reserve price of 90 percent of the gold's value to prevent distressed sales.
These guidelines aim to safeguard borrowers' interests while promoting responsible lending practices among financial institutions. By capping the LTV ratio and introducing standardised procedures, the RBI seeks to mitigate risks associated with gold price volatility and ensure that borrowers are not overwhelmed with debt.
According to analysts tracking gold loans, the demand for gold loans is likely to remain strong, especially among small borrowers who can now access loans up to Rs 2.5 lakh with relaxed underwriting norms.
As regulatory clarity improves, borrowers have a wide range of competitive gold loan options to choose from — with leading banks and NBFCs now offering interest rates starting as low as 8% per annum.
Here are the top 15 banks and non-banking financial companies (NBFCs) offering the lowest interest rate on gold loans, as per data compiled by Bankbazaar.com as on July 1, 2025.
Interest rates offered may vary based on the lender's policies and eligibility criteria.
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Indian Bank
Indian Bank provides gold loans at the lowest interest rate starting at 8 percent. A Rs 1 lakh gold loan with a one-year tenure translates to a monthly installment of Rs 8,699.
Punjab National Bank
Punjab National Bank offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate of 8.35 percent onwards. This results in a monthly EMI of Rs 8,715.
Bank of India
Bank of India offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate starting at 8.6 percent, resulting in a monthly EMI of Rs 8,727.
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Canara Bank
Canara Bank offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate starting at 8.80 percent, resulting in a monthly EMI of Rs 8,736.
Union Bank of India
Union Bank of India offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate starting at 8.95 percent, resulting in a monthly EMI of Rs 8,743.
Kotak Mahindra Bank
Kotak Mahindra Bank offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate of 9 percent onwards. This results in a monthly EMI of Rs 8,745.
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ICICI Bank
ICICI Bank offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate of 9.15 percent onwards. This results in a monthly EMI of Rs 8,752.
HDFC Bank
HDFC Bank, the top private sector bank, offers an interest rate starting at 9.30 percent on gold loans of Rs 1 lakh with a one-year tenure. This results in a monthly EMI of Rs 8,759.
Bank of Baroda
Bank of Baroda offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate starting at 9.40 percent, resulting in a monthly EMI of Rs 8,764.
Axis Bank
Axis Bank offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate of 9.75 percent onwards. This results in a monthly EMI of Rs 8,780.
State Bank of India
State Bank of India, the country's largest public sector bank, offers a gold loan with interest rate starting at 10.25 percent on gold loans of Rs 1 lakh with a one-year tenure. This translates to a monthly EMI of Rs 8,803.
NBFCs
Bajaj Finserv
Bajaj Finserv offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate of 9.50 percent onwards. This results in a monthly EMI of Rs 8,768.
Muthoot Finance
Muthoot Finance provides a gold loan of Rs 1 lakh with a one-year tenure at an interest rate starting at 10.90 percent. This translates to a monthly EMI of Rs 8,834.
IIFL
IIFL offers gold loans of Rs 1 lakh with a one-year tenure at an interest rate of 11.88 percent onwards. This results in a monthly EMI of Rs 8,879.
Mannapuram Finance
Manappuram Finance offers a gold loan of Rs 1 lakh with a one-year tenure at an interest rate starting at 21.59 percent. This results in a monthly EMI of Rs 9,340.
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