These loans, which are given against gold jewellery and ornaments, are popular among people for both personal use and small business needs.
Currently, different types of lenders like banks and non-banking financial companies (NBFCs) follow slightly different rules when it comes to giving gold loans. The RBI now wants to ‘harmonize’ the rules for all types of lenders, may be in a bid to make sure that gold loans are given responsibly.
After RBI Governor Sanjay Malhotra’s announcement, shares of NBFCs like Muthoot Finance and Mannapuram took a sharp dive, nearly 10% and 2.78% respectively.
Also Read: From UPI transaction limit to gold loans- Six measures announced by RBI for banks, fintechs
The RBI is set to release a draft set of guidelines and has invited public feedback before finalizing the rules.
