RBI Report Reveals Surge in Gold Loans Amid Compliance Concerns
Gold loans in India have seen a rapid increase, according to a Reserve Bank of India report. However, the central bank flagged ongoing irregularities among some financial entities. New guidelines aim to address these issues, ensuring sustainable growth as NBFCs continue to dominate the segment.

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- India
The Reserve Bank of India (RBI) report has highlighted a significant upsurge in gold loans across the country, stating that these loans have witnessed accelerated growth as of September 2024 compared to the same period last year. This trend underscores an increasing reliance on gold as collateral to handle financial requirements.
The RBI raised concerns about irregular practices among certain supervised entities (SEs) associated with gold lending. In response, on September 30, 2024, the central bank introduced guidelines advising SEs to reassess their gold loan policies and practices, identifying issues such as poor outsourcing practices, discrepancies in gold valuation, inadequate due diligence, and lack of effective monitoring on loan fund utilization.
The report reaffirms the dominance of Non-Banking Financial Companies (NBFCs) in the gold loan sector, commanding a 59.9% share of total gold loans by March 2024. It also observed a slowdown in other retail lending categories. The RBI stresses the necessity for transparency and compliance to protect borrowers and maintain financial stability, as regulatory measures aim to enhance trust and efficiency in the gold loan market.
(With inputs from agencies.)
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