RBI Tightens Gold Loans Amid Price Volatility, Borrowers Get Less Credit

• The Reserve Bank of India (RBI) is concerned about increasing volatility in gold prices.
• Banks and NBFCs have tightened gold loan disbursements, reducing Loan-to-Value (LTV) from 70-72% to 60-65%.
• Borrowers will now receive less credit for the same quantity of gold due to these new restrictions.
• The gold loan segment has seen rapid growth, reaching a record 3.37 lakh crore rupees by October 2025.
• RBI is also concerned about the changing borrower profile, with younger demographics taking loans often for consumption.

Why It Matters: RBI tightens gold loan norms due to price volatility and rising risks, reducing credit for borrowers.