Business Standard

Will gold loan lose its sheen?

In August 2020, when RBI raised the LTV for gold loans to 90 per cent, effective till March 2021, gold price was at a record high. It's time to pare the LTV for de-risking the lenders

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Tamal Bandyopadhyay
Till January, bank credit had shown a measly 5.7 per cent growth over the previous year. The pace of growth in retail loans, the main driver of bank credit in India for the past few years, slowed down to 9.1 per cent year-on-year in January against 16.9 per cent a year ago. But loan against gold, the new-found love of Indian bankers and borrowers, staged a phenomenal 132 per cent growth during this period. From a low base of Rs 18,596 crore, the ind­us­try’s gold loan portfolio zoomed to Rs 43,141 crore.

This pace of growth is unlikely to sustain. In
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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First Published: Mar 21 2021 | 10:29 PM IST

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