This review exposed multiple deficiencies in the way many Supervised Entities (SEs) are conducting this business, prompting the RBI to call for urgent reform.

The major deficiencies include shortcomings in use of third parties for sourcing and appraisal of loans, valuation of gold without the presence of the customer, inadequate due-diligence and lack of end-use monitoring of gold loans and lack of transparency during auction of gold ornaments and jewellery in case of a default,

Move comes after several irregularities like rolling over of loans, evergreening of loans, and non-categorisation as NPAs were found

The Reserve Bank of India (RBI) has identified irregular practices in the gold loan sector, highlighting deficiencies in loan sourcing, valuation, and monitoring. The bank advised lenders to conduct comprehensive reviews and close gaps within three months,

RBI flags irregularities in gold loan practices, warns of supervisory action for non-compliance with guidelines.

The RBI's review highlighted multiple areas of concern among commercial banks, non-banking financial companies (NBFCs), and cooperative banks regarding their gold loan operations.

The RBI advised all SEs to comprehensively review their policies, processes and practices on gold loans to identify gaps, including those highlighted in this advice, and initiate appropriate remedial measures in a timebound manner.

MUMBAI: In a review, the RBI has found major regulatory lapses by gold loan players and ordered urgent reforms, warning of strict supervisory actions for non-co