RBI Announces New Guidelines for Gold Jewelry Loans in MAY 2025

periyannan3 months ago3 months ago012 mins

RBI Announces New Guidelines for Gold Jewelry Loans in MAY 2025 : RBI Announces New Guidelines for Gold Jewelry Loans in 2025

RBI has issued new rules for getting gold jewelry loans

RBI (Reserve Bank of India) has issued many new restrictions for pawning gold jewelry from January 2025 this year. Let’s see what the rules are for this.

First of all, the Indian government is imposing huge restrictions on gold buyers and gold pawners.
They were issued by RBI under the Savor Gold Bond scheme 10 years ago and distributed in all government banks. According to this scheme, if you get this credit card, for example, if you get a 50 gram gold bond, after 10 years you will be given 50 grams of gold or its equivalent, and 2.5 percent per annum will be credited to your account every six months for the money you paid. For the next 6 months, your money will continue to grow manifold at the compound interest rate of 50 grams of jewelry and interest on the interest amount for six months.

But the central government does not expect the price of gold to rise to the current selling price. The maturity date of the sovereign gold bond, 2024, came and the central government stood by, not knowing what to do. The Indian government did not have the power to reduce the price of gold. It immediately took up a plan, which was to reduce the import duty and accordingly reduced the import duty on gold from 15% to 6%. Due to this, the price of gold decreased, and it was announced that no sovereign gold bond scheme would be implemented now.

In the last March and April periods, people abroad took away the money invested in the Indian stock market and Indian stocks, due to which the central government was stumped. To compensate for this, it tried to stabilize the stock market by using the money in PF and LIC.

However, many stock market agents said that do not buy government shares, invest in treasury bills and when you need money, you can mortgage the jewelry and get the money immediately, and the public rushed to buy gold. Since gold is bought from foreign countries, the foreign exchange is expensive.
Therefore, they tightened the simple rules on gold jewelry loans.

It was stated that the gold jewelry loan borrowers should pay the full amount and receive the jewelry. The jewelry can be re-pawned only after 24 to 48 hours of receiving the jewelry. Due to this, some jewelry pawners were shocked. People resorted to some tricks and the way of pawning jewelry again did not decrease. Therefore, it has now issued 9 new rules, which state that “only those who need gold will buy gold. Those who think it is an investment will not be interested in investing in gold.”

Those who take gold jewelry loans must provide proof (receipt) that you are the owner of the jewelry, or provide a declaration form. If the borrower is in doubt, they can refrain from giving the loan.

Only 75% of the total value of the jewelry to be pawned should be given as a loan.Applicable to all financial lending institutions, both purchased and non-purchased.

To ensure transparency in providing jewelry loans, banks or financial institutions should test the purity and issue a certificate of how many karats of gold it contains. In case of gemstone jewelry, a certificate of how much gold is left after removing the gemstone should be handed over to the borrower and a copy should be attached to the jewelry.

Not all types of gold are accepted for pawning. Only jewelry and specific gold coins in the definition list of jewelry will be accepted for pawning. Gold jewelry should be valued on the basis of 22 karats.
For example, if it is a 22 karat jewelry, its value will be calculated, and if it is an 18 karat jewelry, it will be converted into 22 karat jewelry. Generally, money will be given on the basis of 8.23 grams for 10 grams.
Like gold jewelry, silver items, i.e. silver jewelry and silver coins with 925 (92.5%) purity, can be pledged for a loan. These items will be calculated at 999 (99.9%) and the loan will be increased based on the value of those items.

The customer who takes out a loan for jewelry must sign an agreement with the bank, which must include the following information

The weight of the gold, the rupee value of the gold, the purity of the gold, the auction procedures that will be held if the loan is not repaid, the time limit for repaying the loan and redeeming the jewelry, if the jewelry exceeds the loan amount, the remaining amount will be given to the jewelry owner, and the amount spent on the auction procedure will be collected from the person who borrowed the jewelry.

The jewelry must be returned to the pawnbroker within seven days of the customer repaying the loan. If the loan is not repaid, the buyer or financial institution must pay Rs 5,000 for every four days of delay.

An individual cannot pawn gold jewelry more than 1 kg, and if it is gold coins, the pawn cannot be more than 50 grams.

Even if it is a loan for business investments, the buyer or financial institution must pay only 75% of the value of the pawned jewelry as interest and principal, the RBI has said.

The public who ask the Portuguese about this is, “We are buying our gold jewelry to pawn for an emergency. How can we get a loan if the rules keep increasing like this?”

There is no receipt for traditional jewelry and gold jewelry given as a gift by the mother’s family. Such people are questioning where to go for the receipt and documents for the ownership of the jewelry.

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