Despite heightened fluctuations in gold prices, Reserve Bank of India’s (RBI’s) Governor Sanjay Malhotra has said RBI is very comfortable and not concerned with the outstandings against the precious metal in the financial system. Malhotra said the central bank has done a review of a set of portfolios, including gold loans, and reached the conclusion. 

He said ‘We are very comfortable with gold loans, adding that there is no cause for concern regarding the asset class.’ The overall gold loan outstanding across the financial system almost doubled in the two years to November 2025, driven by a surge in gold prices that encouraged greater lending. However, a sharp decline in the prices of the commodity over the past few days has led to concerns as borrowers can default on their obligations.  

Moreover, he said the loan-to-value ratios in the gold lending segment, which denote the quantum of money that can be given to borrowers against the security, are well below the prescribed industry norms.  He also stated that while the permitted limit is up to 85 per cent, financiers have been keeping the LTV ratio at a much smaller level in practice, which has helped allay the concerns in the book.