 "gold loan")
The Reserve Bank of India (RBI) has issued draft guidelines on gold loans and sought comments. Given the overall size and speed of growth of gold loans (76 per cent growth in the last year), the regulator paying attention to this segment is welcome. In this article, I argue that while the RBI’s efforts to standardise loan terms and prevent evergreening are in the right direction, treating banks more favourably than non-banks is likely to be counterproductive.
To appreciate the spirit of RBI guidelines, it is important to understand the profile of typical gold loan borrowers. These are likely to
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