RBI Draft Directions on Gold Metal Loans 2025 – Key Proposals

Press Release: 2025-2026/1197, Dated: 29.09.2025

1. Introduction

The Reserve Bank of India (RBI) has released draft Directions on Gold Metal Loans (GMLs) as part of its ongoing efforts to further liberalise the scheme and strengthen credit access for the jewellery sector. Alongside these proposals, the RBI has also issued draft amendments to the Large Exposures Framework (LEF) and Intragroup Transactions and Exposures (ITE) norms. These measures aim to balance sectoral growth with systemic risk management.

2. Proposals on Gold Metal Loans

One of the major proposals in the draft directions is to extend the repayment tenor for jewellers—other than exporters—from the existing timeline to 270 days. This change is expected to provide jewellers with greater financial flexibility in managing their working capital cycles. In addition, the draft allows banks to extend gold metal loans to non-manufacturers who outsource jewellery production, thereby broadening the scope of beneficiaries under the scheme.

3. Amendments to Large Exposures Norms

The draft also introduces important changes to the Large Exposures Framework (LEF). These amendments propose to clarify the treatment of exposures of foreign bank branches, ensuring greater consistency in regulatory application. By refining these provisions, the RBI seeks to enhance supervisory clarity and reduce ambiguities in the assessment of large exposures, particularly for internationally active banks.

4. Changes to Intragroup Transactions and Exposures Norms

Under the proposed amendments to Intragroup Transactions and Exposures (ITE) norms, the RBI has suggested aligning ITE provisions with the Large Exposures Framework. Further, the threshold for ITE will now be linked to Tier 1 capital, ensuring a risk-sensitive approach that better reflects the financial strength of banks. These changes will help maintain stability while providing banks with greater regulatory alignment across related-party transactions.

5. Conclusion

Through the release of these draft directions, the RBI is seeking public and stakeholder feedback on both gold metal loan liberalisation and the alignment of exposure frameworks. The proposed changes aim to support the jewellery sector with more flexible credit while reinforcing the prudential norms governing banks. By striking a balance between growth and risk management, the RBI continues to strengthen India’s financial regulatory framework in line with global best practices.

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