The Reserve Bank of India has elevated the permissible loan-to-value (LTV) ratio for gold-backed loans from 75% to 85% for amounts up to ₹2.5 lakh, effective immediately.
This regulatory shift enables borrowers to access increased liquidity against gold assets, particularly impacting small-scale financing. Gem & Jewellery Council Chairman Rajesh Rokde acknowledged the development: “The increase in loan availability from 75% to 85% of gold value enhances liquidity, strengthens financial resilience, and elevates accessibility for small borrowers.”
GJC Vice Chairman Avinash Gupta noted the policy “provides greater financial flexibility, ensuring improved liquidity and convenience for consumers and small businesses.”
Both industry leaders confirmed the change aligns with recommendations submitted to the central bank. The revised framework applies exclusively to loans below ₹2.5 lakh threshold, maintaining existing collateral requirements for larger facilities.
India’s gold loan market has operated under variable LTV caps since 2014, when regulations tightened following earlier 90% thresholds.
