The new framework, which is scheduled to come into effect on April 1, 2026, aims to strengthen regulatory oversight and promote responsible lending practices in the gold loan segment.
In representations made to the RBI, the Finance Ministry, and the Department of Financial Services, the association flagged concerns over the timing of the rollout, given the prevailing geopolitical environment.
Thomas George Muthoot, vice-president, Association of Gold Loan Companies, said, “AGLOC fully supports the Reserve Bank of India’s intent to strengthen regulatory standards. Given the current environment and the need to ensure continued credit access, a calibrated deferment will enable a smoother and more effective implementation.”
The industry body pointed to heightened global uncertainty, particularly due to the evolving conflict in West Asia, which could disrupt energy supply chains, fuel inflationary pressures, and strain household and small business cash flows.
According to the gold loan association, such external pressures have already led to a temporary mismatch in customer cash flows, especially in sectors linked to fuel, LPG, logistics, and agriculture, where rising input costs are affecting borrowers.
It noted that lower- and middle-income segments, which depend heavily on timely access to formal credit, are likely to be disproportionately impacted under current conditions.
Gold loans, the association said, play a counter-cyclical role by providing immediate liquidity, supporting consumption during periods of income volatility, and enabling business continuity for small and informal sector enterprises.
“A calibrated and phased approach to implementation would help ensure a smoother transition while maintaining uninterrupted access to credit,” the association said.
AGLOC added that a pragmatic approach would help sustain liquidity flows to the grassroots level while preserving simple and inclusive access to credit.
In view of these concerns, the association has requested that the implementation of the revised norms be kept in abeyance for six months or until there is greater clarity and stabilisation in the external environment.
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