<ul><li>RBI's newly proposed gold finance regulations are expected to impact non-banking financial companies (NBFCs) more than banks.</li><li>The stricter norms for the Loan-to-Value (LTV) ratio will impact NBFCs extending both consumption and income-generation loans, whereas for banks, the impact will be limited to consumption loans only.</li><li>If the LTV breaches the 75% threshold for more than 30 days, lenders will be required to provision 1% of the total loan amount. This provision can be reversed once the LTV is brought back to 75% or less and remains so for one month.</li><li>The RBI has introduced a classification process to differentiate between consumption loans and income-generation loans. Lenders are required to disclose these two categories of loans separately and assess income-generation loans based on the borrower's cash flows and business needs.</li></ul>

RBI's Tighter Gold Loan Rules To Hit NBFCs Harder Than Banks, Says Nuvama

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