Important compliance note
This page summarises RBI's 2026 gold loan regulatory updates based on available information. Always refer to the official RBI Master Direction document and consult your compliance officer or legal advisor for definitive guidance applicable to your specific business. Regulations may be updated after the date of this publication.
What Changed in RBI's 2026 Gold Loan Update
RBI's LAGSC Directions 2025 (LTV slabs effective from 1 April 2026) replace single-ceiling framing with amount-based LTV limits. The broader 2026 compliance focus also covers LTV monitoring gaps, interest/APR transparency, and auction process weaknesses flagged in recent inspections.
1. Amount-Based LTV Slabs (LAGSC Directions 2025)
Under RBI's Lending Against Gold and Silver Collateral (LAGSC) Directions 2025, maximum loan-to-value (LTV) is set by loan amount — not by bullet vs EMI repayment structure. These amount slabs are in force from 1 April 2026:
| Loan amount (sanction) | Max LTV | Notes |
|---|---|---|
| Up to ₹2.5 lakh | 85% | Highest LTV slab for smaller gold loans |
| Above ₹2.5 lakh up to ₹5 lakh | 80% | Mid slab |
| Above ₹5 lakh | 75% | Standard ceiling for larger exposures |
Do not use the old bullet-vs-EMI LTV framing
Earlier market summaries sometimes described LTV as 85% for bullet repayment and 75% for EMI loans. That is not how LAGSC Directions 2025 work. Apply the amount-based slabs above (upto ₹2.5L → 85%, upto ₹5L → 80%, above → 75%) regardless of bullet or EMI structure, and keep daily LTV monitoring against the applicable slab.
2. Enhanced LTV Monitoring Requirements
The 2026 rules significantly strengthen LTV monitoring obligations for both banks and NBFCs:
- Daily LTV recalculation mandatory — LTV must be recalculated for every active loan every day using the latest gold rate — not just at the time of sanction
- Breach notification within 24 hours — When any loan's LTV breaches its applicable ceiling due to gold price movement, the borrower must be notified within 24 hours
- Corrective action timeline — Borrower has 7 days from LTV breach notification to either provide additional collateral or make a partial repayment to restore compliance
- Automatic alert system required — Lenders must have a system (manual or software-based) that automatically identifies and alerts on LTV breaches — manual daily checking is no longer considered adequate for portfolios above 500 loans
- Portfolio-level LTV reporting — Quarterly reporting to RBI of the distribution of LTV ratios across the gold loan portfolio
3. Updated KYC Requirements
KYC norms for gold loans have been tightened in the 2026 update:
| Loan Amount | KYC Required (2026) | Change from Previous |
|---|---|---|
| Below ₹10,000 | One OVD (Aadhaar / Voter ID) | No change |
| ₹10,000 – ₹50,000 | Aadhaar + PAN or Form 60 | No change |
| ₹50,001 – ₹2,00,000 | Full KYC — Aadhaar + PAN + photograph | PAN now mandatory (was optional up to ₹1L) |
| Above ₹2,00,000 | Full KYC + source of funds declaration | Source of funds now explicitly required |
| Any amount — new customer | Aadhaar OTP e-KYC preferred | Digital KYC now explicitly preferred over paper |
4. Interest Rate Transparency — Stronger Requirements
Following complaints about hidden charges and opaque interest rate communication, the 2026 rules impose stricter transparency requirements:
- APR (Annual Percentage Rate) disclosure mandatory — All lenders must disclose the APR — not just the nominal interest rate — upfront before loan sanction. APR includes all fees and charges.
- Fee schedule publicly displayed — Processing fees, valuation charges, and any other fees must be displayed prominently at all branches and on websites
- No surprise fees — Any fee not disclosed at loan sanction cannot be collected at closure — effective immediately
- EMI / repayment schedule provided at sanction — For EMI-based gold loans, a complete repayment schedule must be provided to the borrower at sanction
- Stepped rate disclosure — If the interest rate increases after a period, all rate tiers must be clearly shown on the loan agreement from day one
5. Auction Procedure Updates
The 2026 rules tighten the auction process following complaints about hasty and under-priced auctions:
- Minimum 3 notices — stricter intervals — Notice intervals are now specified: Notice 1 at 30 days overdue, Notice 2 at 45 days, Notice 3 at 60 days (minimum). Previous rules specified only minimum count, not intervals.
- Auction price floor — Gold must be auctioned at not less than 95% of the current market value — preventing below-market distress sales
- Digital auction records — All auction proceedings must be documented digitally with timestamps — paper-only records no longer accepted for compliance reporting
- Surplus credit within 7 days — Any auction surplus must be credited to the borrower's bank account (not returned as cash) within 7 days of auction completion
- Auction notification to borrower — Borrower must be notified of the auction date at least 14 days in advance (increased from no specific requirement)
What These Changes Mean for Your Business
| Business Type | Key Impact | Action Required |
|---|---|---|
| NBFC (gold loan company) | Must apply LAGSC amount slabs (85%/80%/75% by loan size). Stricter daily LTV monitoring required. | Update software for amount-based LTV slabs. Implement daily LTV alerts. Update loan agreements with APR disclosure. |
| Bank (gold loan portfolio) | Same LAGSC amount slabs apply (85%/80%/75%). Tighter KYC and auction rules apply. | Configure amount-slab LTV in core systems. Update KYC for ₹50K–₹2L bracket. Review auction procedures. |
| State-registered pawn broker | RBI rules do not directly apply but best practice adoption is advisable. State interest ceilings still apply. | Adopt digital KYC. Implement SMS notification system. Ensure auction notice process is documented. |
FinAccSaaS is updated for RBI 2026 compliance
FinAccSaaS gold loan software includes LAGSC amount-based LTV monitoring (upto ₹2.5L 85% / upto ₹5L 80% / above 75%), daily automatic LTV recalculation with breach alerts, APR disclosure in loan documents, updated auction notice tracking with the new interval requirements, and digital KYC with Aadhaar OTP. Book a free demo to see the 2026 compliance features.
Calculate LTV Under the New 2026 Rules
Use our updated Gold Loan LTV Calculator 2026 to calculate the maximum loan amount under LAGSC amount slabs — 85% (upto ₹2.5L), 80% (upto ₹5L), or 75% (above ₹5L) — for any gold weight and purity.
Stay RBI-Compliant with FinAccSaaS
LAGSC LTV slabs (85%/80%/75%), daily alerts, APR disclosure, auction notices — all 2026 compliance requirements automated.