Gold loans surge, RBI raises borrowing limits
Gold-backed loans have more than doubled in just one year, soaring from ₹1.16 lakh crore to ₹2.51 lakh crore by May 2025, according to the RBI.
Minister of State for Finance Pankaj Chaudhary pointed out that while overall inflation has eased to 2.1%, high gold prices are still driving up core inflation.
Gold loans surge, RBI raises borrowing limits
To keep up with demand, the RBI has raised how much you can borrow against your gold—up to 85% of its value for smaller loans, and 80% for mid-sized ones.
Plus, rural banks now have fewer restrictions on repayment options, making it easier for people outside big cities to access credit.
The RBI is also tightening rules around who actually owns the pledged gold and how it's used as collateral, aiming to make lending safer and fairer for everyone.
Even though gold prices are fueling some inflation worries, these changes mean households can get more value out of their gold without selling it.