New RBI regulations aim to make gold loans safer and fairer for borrowers

Loans given against gold jewellery and ornaments are offered by different regulated lenders for both personal use and business needs. Over time, different rules have been made for these loans, depending on the type of lender. To make these rules more uniform and fairer, while also keeping in mind the risk each lender can handle, the Reserve Bank of India (RBI) has decided to introduce a single set of clear and complete guidelines for such loans. These will cover both safety rules and proper conduct.

The Statement on Developmental and Regulatory Policies, issued on April 9, 2025,  stated, "Loans against the collateral of gold jewellery and ornaments are extended by regulated entities (REs) for both consumption and income-generation purposes. Prudential and conduct-related regulations for such loans have been issued from time to time and they vary for different categories of REs. With a view to harmonizing such regulations across REs while keeping in view their risk-taking capabilities, and also to address a few concerns that have been observed, it has been decided to issue comprehensive regulations, on prudential norms and conduct related aspects, for such loans."

Siddarth Jain, CFO at MinEmi said, "Gold loans are among the most frequently availed credit products across India—particularly in regions like the South—used by households and small businesses to manage short-term cash flow needs. As digital adoption in lending increases, it is essential that borrowers are protected through clear communication and responsible practices. Recent concerns around mis-selling and fraud in unsecured lending have shown that customers are often unaware of terms, charges, and repayment obligations."

"We appreciate the RBI’s proactive stance in reviewing gold loan guidelines, as it helps build stronger guardrails around this critical lending category. "We believe that tools like Key Fact Statements (KFS), APR disclosures, and transparent, AI-powered eligibility checks should be adopted across all credit products—including gold loans—to ensure trust, fairness, and financial empowerment for every borrower," said Jain.