RBI ‘very comfortable’ with gold loan exposure despite sharp volatility in prices, says Guv Sanjay Malhotra

Amid sharp volatilities in gold prices, the Reserve Bank said it is very comfortable and not concerned with the outstandings against the precious metal in the financial system.

The central bank has done a review of a set of portfolios, including gold loans, and reached the conclusion, Governor Sanjay Malhotra told reporters after the bi-monthly monetary policy announcement.

“…on the gold loans, we are very comfortable,” Malhotra said, adding that there is no cause for concern on the asset class.

The overall gold loan outstanding across the financial system nearly doubled in the two years to November 2025, as the spike in prices of gold made lenders more comfortable. However, a sharp fall in the prices of the commodity over the past few days has led to concerns as borrowers can default on their obligations.

Malhotra said the loan-to-value ratios in the gold lending segment, which denote the quantum of money that can be given to borrowers against the security, are much lower than the prescribed norms across the industry.

He said as against the allowed limit of up to 85 per cent, financiers have been keeping the LTV ratio at a much smaller level in practice, which has helped allay the concerns in the book.
Governor Malhotra also said that a review of lending to micro, small and medium enterprises and personal loans has also been done along with gold loans.

“All categories, they show good asset quality, low slippages, and no cause for any concern,” he said.