Finance Ministry wants small gold loans exempted

New Delhi

The Finance Ministry has asked the Reserve Bank of India (RBI) to not apply its new draft rules on gold loans to small borrowers. It said people borrowing up to Rs 2 lakh should be left out of the new guidelines. This will help avoid delays in giving loans to those who need small amounts.

The ministry also wants the new rules to start from January 1, 2026. It said banks and lenders will need time to get ready. The Department of Financial Services (DFS), guided by Finance Minister Nirmala Sitharaman, shared these views after looking into RBI’s draft rules.

The rules were issued by RBI in April. They aim to make gold loan rules the same for all banks and non-banking companies (NBFCs). The RBI wants to fix problems it found earlier, such as poor checks before giving loans and lack of clarity during gold auctions after defaults. The new rules also include limits on how much money can be lent against gold and what kind of gold can be used.

The RBI said it is studying all the feedback it has received. The suggestions from the Finance Ministry and other people will be considered before final rules are made.

After the ministry’s statement, shares of Muthoot Finance rose to Rs 2,136.10, and Manappuram shares rose to Rs 233.14.

The Finance Ministry’s move aims to protect small borrowers while still supporting RBI’s efforts to improve gold loan safety and fairness.