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RBI tightens gold loans norms; proposes LTV ratio at 75% of pledged gold’s worth

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RBI has proposed sweeping changes to how financial institutions lend against gold, tightening oversight in a bid to curb risks and bring greater transparency to a booming segment of the country’s credit market.

In draft guidelines released April 3, the Reserve Bank of India (RBI) proposed capping the loan-to-value (LTV) ratio for gold loans at 75% of the pledged gold’s worth. The move would standardize lending limits across banks and nonbank financial companies (NBFCs), ending a pandemic-era relaxation that had allowed NBFCs to lend up to 90% of the value of gold collateral for a year.

The new cap would apply uniformly, regardless of whether loans are intended for consumption, business, or other purposes—a significant shift that levels the regulatory playing field for NBFCs and banks alike.These proposals aim to harmonize regulations across entities while aligning them with risk-taking capabilities according to  RBI Governor Sanjay Malhotra.

India is one of the world’s largest consumers of gold, and borrowing against jewelry and bullion is a common way for households and small businesses to access credit. The sector has grown rapidly, particularly through NBFCs that target less formal borrowers, raising concerns about inconsistent lending practices and over-leveraging.

In addition to the LTV cap, the RBI is pushing for enhanced internal controls and transparency. Lenders will be expected to establish their own LTV thresholds based on internal risk assessments. A standardized valuation framework will also be introduced to ensure consistency in assessing gold collateral across branches.

Under the new rules, banks and NBFCs must disclose the reference price of gold used for loan calculations and implement a uniform methodology to evaluate purity and measure gross and net weights. This information must be made publicly available on their websites.

The proposals are part of the RBI’s broader developmental and regulatory agenda. A public consultation process is now underway, and final guidelines are expected later this year.

The central bank’s move signals a growing focus on borrower protection and market discipline in India’s informal lending space, where gold loans remain a crucial—but sometimes opaque—source of credit.

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National News

Sky Gold & Diamonds To Acquire Purvi Gems In Strategic Move To Drive Growth, Achieve Scale and Product Diversification

Rs 9 Crore Acquisition To Expand Lightweight & Studded Jewellery Portfolio and Boost Domestic and Export Growth

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Sky Gold & Diamonds Ltd., (Sky Gold) one of India’s leading jewellery manufacturers and exporters, has successfully completed the acquisition of 100% equity shares of  Purvi Gems & Jewellery (India) Private Limited, a company engaged in the manufacturing of uncut and precia jewellery and related products. Following the completion of the acquisition on October 7, 2026, Sky Gold is well-positioned to leverage Purvi Gems’ expertise in lightweight and studded jewellery to accelerate growth, enhance product diversification and strengthen its presence across key domestic and export markets.

The transaction is completed for a cash consideration of Rs 9 crores which represents 1.5x over its book value as of 31st Mar’26 and does not constitute a related-party transaction. Neither the promoter nor the promoter group of Sky Gold has any interest in Purvi Gems, reflecting the Company’s disciplined approach towards capital allocation and inorganic growth. The management of Purvi Gems to continue overseeing this business going forward, ensuring continuity and supporting the integration process.

Purvi Gems has built a strong position in specialised jewellery segments that continue to witness growing demand across key regions, including South India and Export market. The acquisition is expected to further enhance company’s exports while strengthening its ability to cater to evolving customer preferences in high margin studded jewellery business.

Key Strategic Benefits from Purvi Gems’ acquisition:

  • Immediate entry into the fast-growing lightweight uncut & precia jewellery segment, expanding Sky Gold’s addressable market
  • Increased exposure to the higher-margin studded jewellery category, supporting improvement in product mix and profitability
  • Potential of ~100 kg of monthly sales, enhancing scale and operational flexibility
  • Opportunity to unlock cross-selling opportunities and increase wallet share by leveraging Purvi Gems’ product portfolio across Sky Gold extensive customer network
  • Enhances export opportunity through specialised products with strong demand across key international markets, particularly the Middle East
  • Acquisition completed at book value, providing access to a business expected to generate over Rs 1,600-1,800 crore of annual revenue over the next two to three years, along with established customer relationships, specialised manufacturing capabilities, and an experienced team
  • Continues Sky Gold’s proven acquisition, which has historically contributed to enhanced scale and improved market positioning

The acquisition represents another important milestone in the company’s growth journey and is aligned with the long-term strategy of expanding its capabilities through carefully selected and strategically relevant acquisitions mainly in value added products having higher margins. Over the years, Sky Gold has successfully integrated acquired businesses to strengthen its market position, broaden its product offerings, improve operational efficiencies and create long-term value for stakeholders. The acquisition of Purvi Gems builds on this track record and further enhances the Company’s presence across high-growth jewellery categories.

Track Record of Successful Acquisitions

AcquisitionsStrategic RationalePre- Acquisition ScalePost- Acquisition Progress
Sparkling Chains Pvt. Ltd.Entry into the fast-moving chains segment; broaden product portfolioTurnover: ₹201 crore as on 31st March 2024 PAT: ₹0.1 croreTurnover: ₹760 crore as on 31st March 2026 PAT: ₹22.3 crore
Starmangalsutra Pvt. Ltd.Entry into the mangalsutra segment; broaden product portfolioTurnover :- ₹171 crore as on 31st March 2024 PAT :- ₹0.07 croreTurnover: ₹622 crore as on 31st March 2026 PAT: ₹22.9 crore
Speed Bangles Pvt. Ltd. (Erstwhile Ganna N Gold Pvt. Ltd.) (Revenues mainly on job work basis)Entry into specialised lightweight bangle manufacturing; broaden product portfolioTurnover: ₹0.87 crore as on 31st March 2025 PAT: ₹0.07 croreTurnover: ₹42 crore as on 31st March 2026 PAT: ₹16.6 crore (Acquired in Aug’25)
Shri Rishabh Gold (Revenues mainly on job work basis)Strengthen capabilities and expand customer baseTurnover: ₹49 crore as on 31st March 2025 PAT: ₹1.60 croreTurnover: ₹175 crore as on 31st March 2026 PAT: ₹18.8 crore (Acquired in Dec’25)

Commenting on the development, Mangesh Chauhan, Managing Director, Sky Gold & Diamonds Ltd., said:

“Strategic acquisitions have been an important driver of Sky Gold’s growth and value creation journey. Our disciplined approach to identifying and integrating businesses has helped us expand capabilities, diversify our product portfolio, improve operating efficiencies and strengthen profitability. Past acquisitions have contributed meaningfully to our scale and growth while creating long-term value for stakeholders. The acquisition of Purvi Gems is another step in this direction. The business brings complementary capabilities in the lightweight uncut and studded jewellery segments, an established customer base and a skilled team.

Given our proven track record of successfully integrating acquisitions and realizing operational synergies, we are confident that Purvi Gems will further strengthen our growth platform and support sustainable long-term value creation.”

Commenting on the development, Jigar Mehta, Director Purvi Gems & Jewellery (India) Pvt. Ltd., said:

“Over the last fifteen years, we have built a strong reputation in lightweight, uncut, and Precia jewellery through our commitment to quality, craftsmanship, and customer relationships. We believe Sky Gold’s scale, manufacturing capabilities, extensive customer network, and proven track record of integrating and growing acquired businesses provide the ideal platform for the next phase of our growth.”

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