A significant decline in gold prices has prompted margin calls on some gold loans, mainly those structured with bullet repayments. Loans paid through regular monthly installments remain largely unaffected. The price correction stems from geopolitical events and interest rate concerns.
The drop in gold values has pushed up loan-to-value ratios on pledged collateral. Lenders have responded by issuing margin calls to affected borrowers.
Loans with bullet repayment terms face the main impact, while EMI-based products show greater resilience. This distinction has limited broader disruption across the gold loan sector.
New regulations from the Reserve Bank of India, combined with a growing shift toward EMI structures, are expected to reduce similar risks going forward. These measures aim to protect both lenders and borrowers from future price volatility.
