September 30, 2025

The Reserve Bank of India (RBI) has just dropped a batch of exciting new rules aimed at making life easier for borrowers and banks alike! Announced on Monday, these amendments focus on speeding up the effect of policy rate changes, giving gold loan norms a fresh boost, and relaxing strict credit exposure limits. Three of the seven changes kick in from October 1, while four others are out as draft proposals, inviting the public to share their views till October 20. Here's the scoop on the juicy updates: First up, banks can now reduce the spread on floating rate loans even before the current three-year lock-in period ends. This means when RBI cuts rates, banks can pass on those savings more quickly. Borrowers might see lower EMIs or less interest to pay soon! Also, banks may offer the choice to switch from floating to fixed-rate loans at interest reset time—but this won’t be mandatory anymore. On the gold front, RBI waves a magic wand! Lending against gold and silver is now wider in scope. Not only jewellers, but any borrower using gold as a raw material, can get working capital loans from banks and smaller urban co-operative banks (tier 3 and 4). This move is set to help many more businesses! In a bold shakeup, RBI also revised Basel III capital rules, boosting the limit for perpetual debt instruments issued abroad in foreign currency or Indian rupees. This helps banks to raise extra tier-1 capital from offshore markets, giving them more financial muscle. Now, the draft proposals ask for more changes. Repayments for gold metal loans (GML) might stretch from 180 days to 270 days, giving borrowers more breathing room. Even non-manufacturing jewellers could get gold loans for outsourced work—new doors are opening! The regulator also plans to align the Large Exposures Framework and rules for foreign bank branches in India. Credit exposures to head offices will count only under the Large Exposures Framework, and more credit risk benefits will apply to a wider range of exposures. To sharpen credit data accuracy, the RBI wants credit institutions to send data weekly to credit bureaus instead of every two weeks. Errors must be fixed faster, and consumer reports will include CKYC numbers for better identification. The RBI is eager to hear what people think about these draft changes by October 20. Could these changes shake up the lending scene? Certainly something to watch!

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Tags: Rbi, Policy rates, Gold loans, Credit exposure, Banks, Regulations,