Valapad : Manappuram Finance Ltd. has welcomed the Reserve Bank of India’s comprehensive and harmonised regulatory framework for lending against gold and silver collateral, as announced in the RBI’s new “Lending Against Gold and Silver Collateral Directions, 2025” notification issued on 6 June 2025.
Mr V. P. Nandakumar, Managing Director and CEO of Manappuram Finance Ltd., stated: “We commend the RBI for introducing a robust, principle-based framework that brings clarity, standardisation, and greater consumer protection to the gold and silver loan segment. The guidelines on valuation, assaying, and loan-to-value (LTV) ratios are timely and progressive. In particular, the provision allowing a maximum LTV ratio of 85% for loans amount up to ₹2.5 lakh. It will significantly benefit small-ticket borrowers.”
The new directions consolidate and replace earlier circulars, creating a uniform code applicable to all regulated entities, including NBFCs, banks, and cooperative institutions. These guidelines aim to promote transparency, ethical practices, and prudential discipline while enhancing financial access for individuals and micro-enterprises.
Mr Nandakumar highlighted that the continued eligibility of gold jewellery, ornaments, and coins as collateral reflects the RBI’s recognition of the critical role of gold loans in meeting short-term liquidity needs.
He further noted: “The standardised assaying process—mandating borrower presence and use of reference prices from the Indian Bullion and Jewellers Association (IBJA) or SEBI-regulated exchanges—will foster uniformity across the industry. Manappuram Finance has long adhered to rigorous valuation norms, and we view this framework as an endorsement of our transparent and ethical lending model.”
On the revised LTV guidelines, Mr Nandakumar observed:
“The RBI has prudently capped LTVs at 85% for loans up to ₹2.5 lakh, 80% for loans between ₹2.5 and ₹5 lakh, and 75% for loans above ₹5 lakh. These thresholds strike a balance between borrower access and systemic stability. We are fully aligned with these stipulations and will implement them rigorously.”
Regarding bullet repayment loans, he acknowledged the RBI’s cap of 12 months for such loans, with renewals allowed only upon creditworthiness and interest repayment.
Commenting on customer conduct and protection norms, Mr Nandakumar said:
“The emphasis on clear documentation, borrower communication, and transparent auction procedures aligns with our customer-first approach. We already involve borrowers in the assaying process and provide detailed disclosures in loan agreements, and these practices will continue.”
On collateral management, he added:
“Manappuram places the utmost importance on secure storage, stringent internal audits, and surprise verifications. The RBI’s directives reinforce our long-standing commitment to safeguarding customer assets.”
Mr Nandakumar also welcomed the RBI’s provisions for fair compensation in the event of loss, damage, or delayed return of pledged assets, and its emphasis on disbursing loans directly into verified bank accounts in compliance with KYC and Income Tax Act provisions. “These directions reflect the regulator’s focus on integrity, accountability, and customer rights. Manappuram Finance is fully prepared to implement the new guidelines well ahead of the April 2026 deadline. We believe this framework will further bolster public trust in gold loans as a reliable and responsible source of credit.” He said.
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