Gold prices reached nearly $4,200 in recent weeks, then fell about 6% this week. (Photo source: NDTV Profit) Show Quick Read Summary is AI Generated. Newsroom Reviewed

Banks have begun implementing tighter controls on their gold loan businesses, as gold prices have experienced volatility. According to at least three bankers in the know, measures include cutting loan-to-value ratios, reducing loan tenures, and even tightening underwriting standards.

While the Reserve Bank of India allows banks to extend up to 85% of the value of the gold in the form of loans, banks feel this offers too thin a margin of safety. In any case, the 85% limit includes interest payments due to banks. Banks are preferring to reduce the loan-to-value ratio to 65-70% for new loans. Additionally, banks are also

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