The Reserve Bank of India is tightening the rules for gold loans due to concerns like lack of transparency and improper risk assessment. The RBI has advised lenders to fix their practices.
The Reserve Bank of India (RBI) is introducing stricter rules for gold loans. Many lenders rely on third-party agents for gold valuations and loan processing.
Some financial institutions aren't conducting thorough background checks, increasing default risk. Auction transparency is also an issue.
Improper monitoring of loan-to-value (LTV) ratios is a major concern. The RBI aims to ensure proper LTV ratios and risk assessments.
Special attention should be given to third-party service providers to prevent misuse and fraud. Improve communication with borrowers.
These new rules aim to promote responsible lending, protect borrowers' interests, and maintain the integrity of the gold loan sector.
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