Gold loan outstanding of banks rises 43.4% in 1st half of FY25

In the first half of FY25, banks reported a 43.4% increase in gold loan disbursements due to high gold prices, leading to a total outstanding amount of Rs 147,081 crore by September 2024. The RBI flagged deficiencies in gold loan practices, prompting a review of policies and processes, including issues like third-party sourcing, inadequate due diligence, and incorrect application of risk-weights. The central bank also noted concerns over cash disbursal, short loan durations, and lack of transparency during auctions, urging lenders to improve their practices to mitigate risks.

Full Article