Latest news with #goldloans
Reuters
19-06-2025
- Business
- Reuters
India's new gold loan rules to reshape lenders' business models, says S&P
June 19 (Reuters) - New rules from India's central bank will make lenders in the booming gold loan market overhaul their underwriting practices and brace for higher near-term costs, S&P Global Ratings said in a note on Wednesday. The Reserve Bank of India's final guidelines on gold-backed lending, issued earlier this month, mandate a shift to cash flow-based credit assessments and tighter monitoring of loan-to-value (LTV) ratios. S&P said these changes will have the greatest impact on non-bank lenders heavily reliant on gold loan portfolios. 'The first is that finance companies face upfront costs as they transition to a cash flow-based assessment of the borrower's creditworthiness," said Shinoy Varghese, credit analyst at S&P Global Ratings. Lenders have until April 1, 2026, to comply with the new norms. While the rules allow greater flexibility in offering short-tenor loans for consumption borrowing, the inclusion of interest rates in LTV calculations may shrink actual disbursals to borrowers, the ratings agency said. S&P said that gold-loan specialists like Muthoot Finance ( opens new tab and Manappuram Finance ( opens new tab will likely face the steepest adjustments. It also warned that as lenders broaden their risk appetite and explore new loan structures, the sector may become more vulnerable to sharp corrections in gold prices.
Times of Oman
06-06-2025
- Business
- Times of Oman
No Need of credit appraisal for gold loans up to Rs 2.5 lakh: RBI Governor
New Delhi: The credit appraisal for small ticket loans up to 2.5 lakh Rupees where gold is given as collateral will not be needed, said Sanjay Malhotra, Governor of the Reserve bank of India (RBI). The RBI Governor said that the regulations on the gold loans were draughted, and final guidelines will be released by Friday evening or at the latest by Monday. Speaking during the press conference after announcing the outcome of the Monetary Policy Committee (MPC), Governor Malhotra said, "There was nothing new in this (draft) that we have released. We have consolidated and reiterated our old rules. Because it was seen that some regulated entities were not following them. Because there was no clarity in it... whatever the final regulation is, we will release it if not today, then by Monday." The statement comes after the government last month asked the RBI to see that the needs of small gold loan borrowers are not affected by the central bank's proposed new rules on lending against gold as collateral. The Finance Ministry in a post on social media platform X informed that it has suggested to the central bank that Draft Directions on Lending Against Gold Collateral issued by the RBI have been reviewed by the Department of Financial Services (DFS) under the guidance of Union Finance Minister Nirmala Sitharaman. The DFS has shared its suggestions with the RBI and requested the central bank to ensure that the new rules do not make it difficult for small borrowers to get gold loans. These borrowers often depend on small-ticket loans to meet urgent personal or business needs. The finance ministry also said that these new guidelines may require time to be implemented properly at the ground level. Therefore, the DFS has suggested that the RBI implement the new directions from January 1, 2026. To further protect small borrowers, the ministry has proposed that those taking loans below Rs 2 lakh should be kept out of the new requirements. This, it said, would help ensure faster and smoother disbursal of small gold loans. The RBI is currently getting feedback from stakeholders on the draft guidelines. The Finance Ministry said that it expects the RBI to carefully consider the concerns raised by various stakeholders and suggestions from the public before finalising the rules.
Yahoo
30-05-2025
- Business
- Yahoo
India federal finance ministry seeks relaxation in central bank's gold loan proposals
MUMBAI (Reuters) -India's federal finance ministry has sought relaxations in the new rules on gold loans proposed by the central bank, according to a post on its official social media handle. The department of financial services under the finance ministry has asked the Reserve Bank of India to ensure that the needs of small gold loan borrowers are not "adversely impacted", a post on the ministry's verified handle on social media platform X said. In April this year, the RBI had proposed tighter rules for monitoring and disbursement of gold loans, often used by low-income borrowers. The tighter rules came after such loans surged nearly 30% between September and February. In its post, the finance ministry said small ticket borrowers below 200,000 rupees ($2,344.05) should be excluded from the tighter rules to ensure "timely and speedy disbursement of loans". The ministry also proposed that the new rules not be implemented before January 1, 2026, to ensure the ground staff at lenders are adequately prepared. The central bank had sought comments on its proposed rules by the middle of May. The final rules are yet to be issued. On the day, Muthoot Finance rose 4.9% and Manappuram Finance traded 0.5% higher as of 10:34 a.m. IST. IIFL Finance was down 0.6%. ($1 = 85.3225 Indian rupees) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
30-05-2025
- Business
- Reuters
India federal finance ministry seeks relaxation in central bank's gold loan proposals
MUMBAI, May 30 (Reuters) - India's federal finance ministry has sought relaxations in the new rules on gold loans proposed by the central bank, according to a post on its official social media handle. The department of financial services under the finance ministry has asked the Reserve Bank of India to ensure that the needs of small gold loan borrowers are not "adversely impacted", a post on the ministry's verified handle on social media platform X said. In April this year, the RBI had proposed tighter rules for monitoring and disbursement of gold loans, often used by low-income borrowers. The tighter rules came after such loans surged nearly 30% between September and February. In its post, the finance ministry said small ticket borrowers below 200,000 rupees ($2,344.05) should be excluded from the tighter rules to ensure "timely and speedy disbursement of loans". The ministry also proposed that the new rules not be implemented before January 1, 2026, to ensure the ground staff at lenders are adequately prepared. The central bank had sought comments on its proposed rules by the middle of May. The final rules are yet to be issued. On the day, Muthoot Finance ( opens new tab rose 4.9% and Manappuram Finance ( opens new tab traded 0.5% higher as of 10:34 a.m. IST. IIFL Finance ( opens new tab was down 0.6%. ($1 = 85.3225 Indian rupees)
Yahoo
30-05-2025
- Business
- Yahoo
India federal finance ministry seeks relaxation in central bank's gold loan proposals
MUMBAI (Reuters) -India's federal finance ministry has sought relaxations in the new rules on gold loans proposed by the central bank, according to a post on its official social media handle. The department of financial services under the finance ministry has asked the Reserve Bank of India to ensure that the needs of small gold loan borrowers are not "adversely impacted", a post on the ministry's verified handle on social media platform X said. In April this year, the RBI had proposed tighter rules for monitoring and disbursement of gold loans, often used by low-income borrowers. The tighter rules came after such loans surged nearly 30% between September and February. In its post, the finance ministry said small ticket borrowers below 200,000 rupees ($2,344.05) should be excluded from the tighter rules to ensure "timely and speedy disbursement of loans". The ministry also proposed that the new rules not be implemented before January 1, 2026, to ensure the ground staff at lenders are adequately prepared. The central bank had sought comments on its proposed rules by the middle of May. The final rules are yet to be issued. On the day, Muthoot Finance rose 4.9% and Manappuram Finance traded 0.5% higher as of 10:34 a.m. IST. IIFL Finance was down 0.6%. ($1 = 85.3225 Indian rupees)
