RBI’s LTV Norm Revision to Boost NBFC Gold Loan Growth:
The Reserve Bank of India (RBI) has issued final directions allowing higher loan-to-value (LTV) ratios for gold loans, a move that is expected to benefit non-banking financial companies (NBFCs) that dominate this lending segment. According to Crisil Ratings, this breather in LTV ceiling especially for smaller ticket loans—will provide NBFCs with more flexibility and growth opportunities, while also necessitating improved risk management to guard against potential volatility in gold prices.Crisil Ratings published an analysis of the RBI’s updated final directions on gold loan norms, which include a revised LTV grid allowing up to 85% LTV for loans up to ₹2.5 lakh. These changes are set to become effective from April 1, 2026. The development is relevant as gold loans remain a popular secured lending option in India, particularly among low- to middle-income households, and NBFCs account for a substantial share of the portfolio.
