ENA Sectors 2025-01-02 14:03:48 <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif"><strong>New Delhi, Jan 2 (KNN)</strong> The Reserve Bank of India (RBI) has reported significant growth in gold loans across the country through September 2024, indicating an increasing trend among borrowers to leverage gold assets for their financial needs. </span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">The central bank's latest report highlights this expansion while simultaneously addressing concerns about lending practices in the sector.</span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">The growth trajectory has prompted regulatory attention, with the RBI issuing comprehensive guidelines on September 30, 2024, directing supervised entities (SEs) to conduct thorough reviews of their gold loan operations. </span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">The guidelines address several operational gaps identified by the central bank, including issues in outsourcing practices, gold valuation discrepancies, inadequate due diligence procedures, and insufficient monitoring of loan fund utilisation.</span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">Non-Banking Financial Companies (NBFCs) continue to maintain their dominant position in the gold loan market, commanding a substantial 59.9 percent share of total gold loans disbursed by both banks and NBFCs as of March 2024. </span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">This significant market share underscores NBFCs' crucial role in meeting the demand for loans against gold jewelry and ornaments.</span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">The report also reveals a broader shift in retail lending patterns, noting a marked slowdown in other credit categories. Unsecured personal loans have experienced a notable decline since September 2023, while microfinance and self-help group (SHG) loans within the retail advances segment have seen their growth rates diminish by more than two-thirds over the past year.</span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">Through these regulatory measures and increased oversight, the RBI demonstrates its commitment to ensuring sustainable growth in the gold loan sector while protecting borrower interests and maintaining financial stability. </span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif">As NBFCs maintain their leadership in this segment, the implementation of these guidelines is expected to enhance transparency and operational efficiency in the gold loan market.</span></span></p> <p><span style="font-size:14px"><span style="font-family:Arial,Helvetica,sans-serif"><em><strong>(KNN Bureau)</strong></em></span></span></p> 40477 https://knnindia.co.in/news/newsdetails/sectors/new-guidelines-issued-amid-rapid-growth-in-gold-loan-market-rbi 2025-01-02 14:03:48 knnindia.co.in