Loans against the collateral of gold jewellery and ornaments, commonly known as gold loans, are extended by regulated entities for both consumption and income-generation purposes. In order to harmonise guidelines across various types of regulated entities, to the extent possible, keeping in view their differential risk-bearing capabilities, we shall issue comprehensive regulations on prudential norms and conduct related aspects for such loans, said RBI Governor Sanjay Malhotra during his policy address today.

In response to the announcement, Muthoot Finance shares dropped 4.75%, IIFL Finance declined 2.37%, and Manappuram Finance slid 1.46%.

This development was announced in conjunction with a broader monetary policy adjustment. The RBI reduced the key policy repo rate by 25 basis points to 6%, marking its second consecutive rate cut, and shifted its policy stance from neutral to accommodative.

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