What changed
RBI has revised the instructions on lending against gold and silver collateral to address prudential and conduct-related gaps across regulated entities (REs). The revised Directions consolidate the extant regulations and provide necessary clarity on certain aspects.
What it means for you
The revised Directions aim to put in place a harmonized regulatory framework for loans against gold and silver collateral, address concerns related to lending practices, and strengthen conduct-related aspects. This will help REs to provide borrowers with an avenue to tide over their tight liquidity conditions while addressing the risks for lenders.
What you must do
- Comply with the revised Directions as expeditiously as possible but no later than April 1, 2026.
- Review and update existing lending practices to align with the revised Directions.
- Ensure that loans sanctioned prior to the adoption of the Directions continue to be governed by the extant guidelines applicable before the issuance of these Directions.
Who it affects
Commercial Banks, Primary (Urban) Co-operative Banks, Rural Co-operative Banks, All Non-Banking Financial Companies
What is the effective date of the revised Directions?
The revised Directions shall be complied with as expeditiously as possible but no later than April 1, 2026.
Will existing loans be affected by the revised Directions?
Loans sanctioned prior to the adoption of the Directions shall continue to be governed by the extant guidelines applicable before the issuance of these Directions.