Will Loans Below Rs 2 Lakh Be Exempt From Tighter Rules Under New Gold Loan Norms? Finance Ministry Steps In

New Delhi: The Finance Ministry stated on Friday it has instructed that the Reserve Bank of India (RBI) will have to exclude small debtors of as much as Rs 2 lakh from the provisions of its draft instructions on lending in opposition to gold collateral. The Finance Ministry has additionally instructed that the implementation of the tips be postponed to subsequent yr. 

“The draft directions on lending against gold collateral issued by the RBI have been examined by the Department of Financial Services (DFS) under the guidance of Finance Minister Nirmala Sitharaman. The DFS has given suggestions to the RBI to ensure that the requirements of the small gold loan borrowers are not adversely affected,” the Finance Ministry stated in a remark on X.

DFS has additionally mentioned that such tips will want time to put into effect on the box degree and therefore is also appropriate for implementation from January 1, 2026 handiest, the remark stated.

Further, DFS has instructed that debtors underneath Rs 2 lakh is also excluded from the necessities of those proposed instructions to make sure well timed and fast disbursement of loans for such small price tag debtors, the remark defined.

“RBI is reviewing the comments gained at the Draft tips. It is predicted that considerations raised through more than a few stakeholders, in addition to the comments gained from the general public, might be duly thought to be through the RBI earlier than finalising the instructions at the similar. The tips were duly forwarded to the RBI,” the remark added.

Shares of Muthoot Finance and Manappuram rose at the FinMin’s comments, buying and selling at Rs 2,136.10 and Rs 233.14 apiece, up 3.07 in keeping with cent and 0.57 in keeping with cent respectively.

Earlier in April, the RBI issued draft tips, searching for to ascertain uniform laws and rules for buying gold loans from banks and NBFCs.

However, the draft laws imposed some restrictions relating to the kind of gold this is eligible as collateral and the utmost mortgage quantity a financial institution or NBFC can lengthen.

The RBI had discovered some shortcomings reminiscent of susceptible mortgage appraisal mechanisms, deficient tracking of the top use of finances, and loss of transparency all the way through gold auctions after default. The draft tips are actually supposed to harmonise norms throughout several types of lenders, whilst additionally reflecting their respective risk-bearing capacities.