New Delhi, May 30 The Finance Ministry said on Friday it has suggested that the Reserve Bank of India (RBI) should exclude small borrowers of up to Rs 2 lakh from the provisions of its draft directions on lending against gold collateral. The Finance Ministry has also suggested that the implementation of the guidelines be postponed to next year.
“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 said in a statement on X.
DFS has also stated that such guidelines will need time to implement at the field level and hence may be suitable for implementation from January 1, 2026 only, the statement said.
Further, DFS has suggested that borrowers below Rs 2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans for such small ticket borrowers, the statement explained.
“RBI is reviewing the feedback received on the Draft guidelines. It is expected that concerns raised by various stakeholders, as well as the feedback received from the public, will be duly considered by the RBI before finalising the directions on the same. The suggestions have been duly forwarded to the RBI," the statement added.
Shares of Muthoot Finance and Manappuram rose on the FinMin's feedback, trading at Rs 2,136.10 and Rs 233.14 apiece, up 3.07 per cent and 0.57 per cent respectively.
Earlier in April, the RBI issued draft guidelines, seeking to establish uniform rules and regulations for getting gold loans from banks and NBFCs.
However, the draft rules imposed some restrictions regarding the type of gold that is eligible as collateral and the maximum loan amount a bank or NBFC can extend.
The RBI had found some shortcomings such as weak loan appraisal mechanisms, poor monitoring of the end use of funds, and lack of transparency during gold auctions after default. The draft guidelines are now intended to harmonise norms across different types of lenders, while also reflecting their respective risk-bearing capacities.
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