Mumbai: Amid sharp volatility in gold prices, the RBI said it is comfortable with the level of gold loan exposure in financial system and sees no cause for concern.
Governor Sanjay Malhotra said the RBI has reviewed several loan portfolios, including gold loans, following the bi-monthly monetary policy announcement. He noted that despite recent fluctuations in gold prices, asset quality in the segment remains sound.
Gold loan outstandings across the financial system nearly doubled in the two years to November 2025, as rising gold prices encouraged lending. However, the recent decline in gold prices had raised concerns over potential borrower defaults. Malhotra said these risks are mitigated by conservative lending practices.
He pointed out that loan-to-value ratios in gold lending are well below the regulatory ceiling of 85 per cent, with lenders maintaining significantly lower levels in practice. This has helped cushion the impact of price volatility.
The RBI has also reviewed lending to MSMEs and personal loans. Malhotra said all segments continue to show good asset quality, low slippages and no signs of stress.