gold loan
Budget 2026 Wishlist: Finance Minister Nirmala Sitharaman is going to present the country’s general budget (Union Budget 2026) on 1 February. This time every class has some expectations from the budget, but if you have taken a gold loan or are thinking of taking a loan by mortgaging your jewellery, then this news is very important for you. In the last few years, the trend of taking gold loan has increased rapidly among Indian families. In times of trouble, gold kept in the house becomes the biggest support. Keeping this in mind, the gold loan industry has put forward some demands before the government, which if accepted, will not only make it cheaper for the common man to take a loan but will also become very easy.
Will NBFCs get facilities like banks?
Non-banking financial companies (NBFCs) like Muthoot Finance and Mannapuram Finance have made a very reasonable demand from the government. These companies argue that most of the customers who come to them for gold loans are from middle or low income group. Statistics show that most gold loans are for less than Rs 50,000. People often use this money for treatment of diseases, children’s education, farming or running small businesses.
The problem is that when banks give loans to such people, they get the benefit of ‘Priority Sector Lending’ (PSL), due to which banks get cheap funds. But when NBFCs do the same work, they do not get this benefit. NBFCs have to raise money from the market at expensive rates and the burden ultimately falls on the customer’s pocket. The industry demands that they should also get ‘Priority Sector’ status like banks. If this announcement is made in the budget, then the cost of raising funds of NBFCs will reduce and they will be able to give gold loans at lower interest rates to the people of rural areas and small towns.
New loan plan from UPI
In today’s era, there is hardly anyone who does not use UPI. The gold loan industry wants to take advantage of this digital revolution. A big expectation from the budget is regarding ‘Gold Credit Line’. You will be able to use revolving credit line through your UPI apps. That means, when needed, the money was used immediately and when the money came in hand, it was deposited. If the government takes steps in this direction, then people living in remote areas will be freed from the compulsion of taking loans from moneylenders at expensive interest rates.
Companies will be freed, customers will benefit
Apart from the benefits to the customer, gold loan companies have also asked for some convenience in the way they operate. At present, the rules of ‘single-counterparty exposure limit’ on NBFCs providing gold loans are quite strict. The industry says that gold loan is completely secured and there is little risk of losing money in it, because the gold is pledged against the loan. The record of loan repayment has also been very excellent in this sector.
In such a situation, the industry is demanding that their exposure limit should be increased to 20 percent of Tier-1 capital. If the government relaxes these rules a little, then companies that have sufficient capital will be able to utilize it better. This will increase cash flow in the market and loan options will become more accessible to customers.