Current Affairs - Banking - Discussion

The Reserve Bank of India has increased the Loan-to-Value (LTV) ratio for gold loans up to ₹2.5 lakh from 75% to 85%, effective April 1, 2026. This change is part of a broader strategy to enhance credit access for small-ticket borrowers while maintaining robust risk management practices. The decision comes amid a surge in gold loan demand and rising non-performing assets (NPAs) in this segment. By allowing a higher LTV, borrowers can access more funds against the same amount of gold, offering critical financial relief, especially to those in the lower income brackets. However, stricter lender protocols will be enforced to ensure systemic stability.