New Delhi, June 19 || The RBI’s latest directions on gold loans will change India’s landscape for this booming lending segment with lenders nimble enough to adjust their business model standing to gain, according to an S&P Global Ratings report released on Thursday.
The report is of the view that lenders will have more latitude to offer shorter-tenor loans for gold-backed consumption loans, allowing smaller borrowers to unlock more value from their pledged gold assets.
It also highlights that operational agility and service excellence will remain the key differentiator between lenders.
Lenders have until April 1, 2026, to prepare for the changes. The report identifies two elements of the new rules as the most notable.
The first is the inclusion of interest payments until maturity in the calculation of loan-to-value (LTV) ratios. This effectively could limit the upfront loan amount disbursed, something which lenders will try to overcome as this goes against typical borrower preference.
The second is the application of credit appraisal based on borrowers' cash flow analysis for consumption-focussed loans above $3,000 and all income-generating loans.