In a major policy move, the Reserve Bank of India (RBI) has proposed a new set of comprehensive guidelines aimed at tightening the regulations around loans secured against gold jewellery. This move is part of the central bank’s broader objective to harmonise gold loan norms across different types of regulated entities (REs), including both banks and non-banking financial companies (NBFCs).
As per the draft shared by the RBI, lenders will be required to disburse loans directly into the bank accounts of customers. Cash disbursements will be permitted only in line with Section 269SS and 269T of the Income Tax Act, 1961, ensuring transparency and regulatory compliance.
Furthermore, RBI has also mandated that multiple gold loans sanctioned to a single borrower or related group must undergo more stringent audits to avoid misuse and potential fraud. All loan-related transactions must be made directly between the lender and borrower, without routing through any third-party pass-through accounts or pool accounts unless otherwise permitted by the RBI.
The guidelines also address the issue of unclaimed gold collateral, stating that if gold remains with the lender two years after full repayment, it shall be marked as “unclaimed.” Lenders will need to conduct regular drives to trace such borrowers or their legal heirs and present status reports to their boards every six months.
Another significant provision includes enhanced transparency. Lenders must disclose in their annual financial statements the total value and percentage of loans extended against gold, segregated for consumption and income-generation purposes.
This regulatory overhaul is being seen as a step towards improving borrower protection, preventing over-lending, and ensuring better compliance and accountability in the gold loan segment.
