National News

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

Published

1 year ago

April 10, 2025

908 Views

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.

National News

MCX Gold and Silver Experiencing Downward Pressure Amid Macroeconomic Headwinds

MCX Gold and Silver Face Tactical Bearish Pressures from Macro-Geopolitical Synergies, Yet Structural Uptrends Offer Opportunistic Entry Points Above Core Supports

Published

30 minutes ago

April 24, 2026

JewelBuzz Spread The Buzz

1,972 Views

MCX Gold and Silver markets are experiencing downward pressure amid escalating geopolitical tensions and macroeconomic headwinds. This report provides a strategic analysis of current dynamics, leveraging real-time data for informed stakeholder decision-making.

Executive Summary

The MCX Gold futures have dipped below the pivotal Rs 1.51 lakh threshold per 10 grams, reflecting a 0.31% decline to Rs 1,49,950 in early trading on April 24, 2026, while Silver hovers around Rs 2.40 lakh per kg with a 0.56% drop to Rs 2,40,168. These movements stem from heightened US-Iran hostilities at the Strait of Hormuz, bolstering crude oil prices and inflationary expectations, which in turn elevate the opportunity cost of non-yielding bullion assets.

Market Performance Overview

Gold Pricing Dynamics: MCX Gold May futures opened lower at Rs 1,49,950, recovering marginally from sub-Rs 1.51 lakh lows after prior session gains to Rs 1,50,750; spot international gold trades below $4,700/oz.
Silver Pricing Trajectory: MCX Silver May futures at Rs 2,40,168, down from Rs 2,42,213, with intraday lows near Rs 2,39,200 amid a slower selloff pace versus recent sharp declines.
Volatility Metrics: Weekly declines accelerated by US Dollar strength (up ~1%) and 10-year Treasury yield surge (>2%), compressing bullion appeal in a high-rate paradigm.

Key Risk Drivers

Elevated energy costs from US-Iran escalations, including naval blockades and mine-laying incidents at the Strait of Hormuz, have intensified inflationary risks and fueled speculation of prolonged elevated interest rates by central banks. President Trump’s directives for US Navy interventions and indefinite ceasefire extensions underscore persistent geopolitical volatility, indirectly pressuring bullion as a safe-haven amid dollar dominance.

Strategic Outlook and Recommendations

Bullish momentum persists in medium-term technicals, with Gold targeting Rs 1.63 lakh and Silver Rs 2.80 lakh if supports hold, though near-term headwinds from yield curves and crude spikes warrant hedging strategies. Stakeholders should prioritize portfolio rebalancing toward diversified yield-bearing alternatives while monitoring Hormuz developments for pivot reversals.

MCX Gold and Silver face tactical bearish pressures from macro-geopolitical synergies, yet structural uptrends offer opportunistic entry points above core supports—positioning for volatility-normalized alpha generation.