Gold Loan Borrowers Get Double Boost: Budget 2026 to Unveil Key Reforms?

• Union Budget 2026 is expected to introduce measures to enhance financial inclusion and support loan-based development, benefiting households and small businesses.
• Proposals include granting Priority Sector Lending (PSL) status to eligible gold loan NBFCs, which would reduce their borrowing costs and allow them to offer lower interest rates.
• A gold-linked credit line via UPI is proposed, enabling consumers to access revolving credit using idle gold jewelry at lower interest rates than unsecured credit cards.
• The budget may address the stricter single counterparty exposure limits for gold loan NBFCs, potentially equating them to the standard 20% of Tier-1 capital.
• Higher interest rates on secured Non-Convertible Debentures (NCDs) for retail investors, senior citizens, and pensioners are suggested to boost household savings.

Why It Matters: Budget 2026 may bring significant reforms for gold loan borrowers and NBFCs, including PSL status and UPI-linked credit.