New Delhi, Mar 23 (KNN) The Association of Gold Loan Companies (AGLOC) has urged the Reserve Bank of India (RBI) to defer the implementation of revised norms on lending against gold and silver collateral by up to six months, citing geopolitical uncertainty and potential disruptions to credit access.
Industry Seeks Deferment Of New Lending Norms
In representations made to the RBI, the Ministry of Finance and the Department of Financial Services, the industry body requested that the new guidelines, scheduled to come into effect by April 1, 2026, be postponed or implemented in a phased manner until external conditions stabilise.
The revised framework aims to strengthen regulatory standards and promote responsible lending practices. However, AGLOC said the current global environment, particularly tensions in West Asia, could impact energy supply chains, trigger inflationary pressures, and disrupt cash flows for households and small businesses.
Concerns Over Credit Flow And Borrower Impact
Thomas George Muthoot, Vice President, AGLOC, said the industry supports the RBI’s intent but called for a calibrated approach to ensure smoother implementation without affecting credit availability.
The association noted that sectors linked to fuel, LPG and logistics are already witnessing disruptions, while rising agricultural input costs are affecting borrowers in the farm sector.
These factors, it said, are creating a temporary mismatch in customer cash flows, particularly among lower- and middle-income segments that depend on timely access to formal credit.
AGLOC emphasised that gold loans play a counter-cyclical role by providing immediate liquidity during periods of income volatility and supporting consumption, especially for small and informal businesses.
The body added that a deferment would help maintain uninterrupted credit flow at the grassroots level while allowing lenders to adapt to the new regulatory framework more effectively.
(KNN Bureau)
2012-01-26
