By Sagar Patel
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The Reserve Bank of India (RBI) on Monday said it has found several irregularities in the functioning of institutions providing loans against gold and asked them to review their policies and portfolios. In a message sent to lenders, the Central Bank said that a recent review into compliance with prudential guidelines has revealed several failures in relation to loans granted against jewelery and gold jewellery. Let us also tell you what the Reserve Bank of India has said?
RBI found fault
According to the RBI, deficiencies in the use of third parties for obtaining and valuing loans, valuation of gold in the absence of the customer, inadequate due diligence and failure to monitor the end use of gold loans and gold jewelery in case of defaults . During the auction, defects such as lack of transparency were found. A recent study by rating agency ICRA said that despite the recent measures taken by the RBI, there has been good growth in gold loans and the portfolio of organized lenders is expected to touch Rs 10 lakh crore by March. of 2025.
Strict guidelines issued
The RBI advised all institutions involved in the gold lending business to thoroughly review their policies and procedures, identify deficiencies and initiate appropriate corrective measures within a time-bound period. As per the RBI notification, it must also be ensured that these entities have adequate control over outsourced activities and third-party service providers. It says gold loan lending institutions can inform the RBI’s Senior Supervisory Manager about their action within three months. Non-compliance with the guidelines in this regard will be taken seriously by the Reserve Bank.
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I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,
