National News
RBI tightens gold loans norms; proposes LTV ratio at 75% of pledged gold’s worth
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
GJEPC addresses issue of Termination of IEEPA-Based Reciprocal Tariffs
GJEPC informed all exporter members of an important interim development concerning U.S. import duties applicable to Indian exports, particularly in the gem and jewellery sector.
The Gem & Jewellery Export Promotion Council (GJEPC) informed all exporter members of an important interim development concerning U.S. import duties applicable to Indian exports, particularly in the gem and jewellery sector.
A letter issued by Sabyasachi Ray, Executive Director, GJEPC, addressed the Termination of IEEPA-Based Reciprocal Tariffs and outlined key implications for exporters.
Termination of IEEPA-Based Reciprocal Tariffs
Pursuant to the Executive Order dated February 20, 2026, titled “Ending Certain Tariff Actions”, the additional ad valorem duties imposed under IEEPA, including the reciprocal tariff framework under Executive Order 14257, shall no longer remain in effect and are directed to be terminated as soon as practicable.
Accordingly, entries made on or after February 20, 2026 should not be subject to the earlier IEEPA-based reciprocal tariffs.
1. Interim Window Prior to Section 122 Surcharge
A separate Presidential Proclamation dated February 20, 2026 imposes a temporary 10% surcharge under Section 122 of the Trade Act of 1974, effective 12:01 a.m. EST on February 24, 2026.
Therefore, between: February 20, 2026 – before 12:01 a.m. EST on February 24, 2026 imports into the United States should be subject only to ordinarily applicable HTSUS (MFN) rates, without the earlier reciprocal tariff, and prior to the commencement of the Section 122 surcharge.
For products such as cut and polished diamonds (where the MFN rate is ordinarily 0%), this period represents a limited operational window.
2. Refund Position (If Collected in Error or Due to Implementation Lag)
In cases where reciprocal IEEPA duties are collected due to implementation lag, such duties should be eligible for refund through the standard:
- U.S. Customs and Border Protection (CBP) protest mechanism under 19 U.S.C. §1514, or
- Post-summary correction procedures, as applicable.
However, exporters should note that there is no assurance that the refund process will not be time-consuming.
3. Important Caution for Exporters
While GJEPC is actively engaging with U.S. customs authorities and keeping customs at Bharat Diamond Bourse informed, members are strongly advised to:
- Seek confirmation from their U.S. customs broker and trade counsel
- Obtain written confirmation from their U.S. buyer/importer regarding entry treatment
- Confirm that CBP has ceased collection of the reciprocal tariff at the port of entry
Given the evolving implementation environment, entry-level verification is critical.
Members are encouraged to carefully assess:
- Shipment timing
- Entry dates
- Applicable HTS classification
before dispatching consignments, wherever applicable.
source: GJEPC
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