Loans may become cheaper with RBI’s new rules:Taking loans on gold and silver will also be easier, proposal to update credit reports every week

Loans may become cheaper in the coming days. RBI has changed the rules related to loans and capital raising for banks. Three of these changes will be implemented from October 1, while public opinion has been sought on other proposals till October 20, 2025. Here we are explaining these changes in detail, one by one… 1. Loans may become cheaper The most important change is related to the interest rates of floating loans. Under the existing rules, banks could change the spread on an external benchmark only once in three years. This meant borrowers were locked into higher spreads even when market conditions improved. The new rules will allow banks to reduce spreads more quickly. Spread means the additional interest rate that banks add to the loan’s interest rate. When you take a loan at a floating rate, its interest rate is based on the Reserve Bank’s repo rate. Banks add their own additional percentage (spread) on top of this repo rate, which covers their costs, risks, and profits. Example: If the repo rate is 6% and the bank’s spread is 2%, then you will have to pay a total of 8% interest. Under the old rules, banks could not change this spread for three years. This did not benefit the borrower. Now, under the new rules, banks can reduce the spread quickly, which can lower your interest rate. Earlier, when banks changed the interest rate of floating rate loans, they had to offer the customer a fixed rate option. Now, under the new rules, banks will have more freedom to decide whether or not to offer a fixed rate option. This will give banks the freedom to change their lending process. 2. Gold and Silver loans now easier RBI has expanded the scope of lending against gold and silver. Until now, banks could not provide loans to jewelers for purchasing raw gold or silver. They only received loans for working capital. Now, those who use gold as a raw material in manufacturing or industrial work will also be able to take loans. Additionally, Tier-3 and Tier-4 Urban Cooperative Banks will also be able to provide working capital loans against gold. This will benefit regional jewelers and small businesses involved in gold-based manufacturing. 3. Banks’ balance sheets will become stronger RBI has amended a rule related to Perpetual Debt Instruments (PDI) to further strengthen banks’ balance sheets. These PDIs are a type of bond through which banks raise funds. The new rules allow banks to issue more PDI through foreign currency or rupee bonds abroad. This will enable banks to raise more capital from foreign investors. This capital (Tier-1 capital) will strengthen banks, enabling them to provide more loans and better manage economic risks. Proposals on which RBI sought opinions… 1. Stricter credit checks and reporting: RBI has proposed weekly reporting to strengthen the credit system. Currently, credit institutions (like banks) send borrowers’ data to credit bureaus every 15 days. Weekly reporting will make credit reports more fresh and reliable. 2. Changes in gold metal loan scheme: The GML scheme was launched in 1998, under which banks provide working capital to jewelers by giving them raw gold. RBI is preparing to make the GML scheme easier. Two major changes have been proposed in this… You can send feedback on the draft until October 20 You can send your feedback to RBI’s “Connect 2 Regulate” portal or the Department of Regulation via email until October 20. These proposals focus on easing borrowing as well as ensuring the security of the system.