CHENNAI: Following concerns raised, mainly from Tamil Nadu, that the proposed norms for gold loans issued by the Reserve Bank of India will seriously affect small borrowers, the Department of Financial Services (DFS) functioning under the Union Ministry of Finance on Friday said that it has suggested to the RBI to ensure that the requirements of small gold loan borrowers are not adversely affected.
Leaders of parties across the political spectrum in Tamil Nadu had expressed concerns over the draft norms. Chief Minister MK Stalin on Wednesday wrote a letter to Union Finance Minister Nirmala Sitharaman, requesting her urgent intervention as the rules would disrupt access to credit, especially for farmers, and affect rural economy. He objected in particular to the rule to prohibit banks from accepting gold as security for agricultural loans of up to Rs 2 lakh.
A statement from DFS on Friday said the new guidelines — Draft Directions on Lending Against Gold Collateral — will need time to be implemented at the field level and hence may be suitable for implementation only from January 1, 2026.
It further said it “has suggested that small ticket borrowers below `2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans for such small borrowers”.
Welcoming the announcement, CM Stalin said protecting the interests of small borrowers and ensuring timely and accessible credit to them have been his consistent demands. The CM also emphasised that such policies, having a significant impact on the poor, should be arrived at after prior consultation with states.
CPM MP Su Venkatesan, who had requested Sitharaman in person to withdraw the RBI’s guidelines, said the minister’s response is a big victory for the people’s voice. He expressed hope that the RBI would withdraw all proposed restrictions for availing of gold loans.
AIADMK general secretary Edappadi K Palaniswami urged the centre to remove all restrictions.
Gold loans help small farmers meet urgent needs: EPS
Continued from Page 1: Edappadi added that gold loans serve as a vital means for farmers, small traders, and economically weaker sections to meet urgent needs such as medical and educational expenses.
BJP state president Nainar Nagenthran also welcomed the decision. PMK president Anbumani Ramadoss said the relaxations recommended by DFS would not suffice, and the present procedure for issuing gold loans should continue.
May be Implemented from jan 1, 2026: DFS
A statement from Department of Financial Services (DFS) said the ‘Draft Directions on Lending Against Gold Collateral’ will need time to implement at the field level and hence may be suitable for implementation only from January 1, 2026