RBI’s Precision Regulation Move Frees Gold-Loan NBFC Branch Expansion

RBI is set to ease branch expansion for large gold-loan NBFCs, removing a long-standing approval hurdle and pushing faster secured-credit growth nationwide.

Gold-loan lending is again in focus as the central bank’s latest move signals quicker branch-led growth for large NBFCs specialising in loans against jewellery. The proposed easing is being read as “precision regulation”, letting established lenders scale distribution while oversight shifts more to outcomes and governance. 

For customers, it could mean faster access to secured credit in semi-urban and rural districts where branch presence still drives trust, appraisal and disbursal speed. For the industry, it sharpens competition as big networks can add outlets without waiting for a regulatory go-ahead each time.

What Is Changing For Gold-Loan NBFC Branch Expansion?

The immediate issue has been the approval gate that kicks in once gold-loan NBFCs cross a large branch count. Under the existing framework highlighted in market reports, gold-loan NBFCs have needed explicit approval to expand beyond 1,000 branches, a process that often adds delays and compliance steps. 

The fresh easing is meant to cut that friction and let branch rollouts track demand more closely, especially where physical verification and local familiarity are still central to underwriting.

The Key Shift In The Rulebook And Why It Matters

Coverage across business dailies indicates that the regulator has moved to free up branch expansion for large gold-loan NBFCs by dropping the prior-approval requirement that constrained branch additions beyond the threshold. 

That change is expected to benefit major gold-loan players and diversified NBFCs with sizeable gold-loan businesses, as they can widen reach without regulatory waiting time. The Economic Times Reports also note that overseas representative offices would still need approval, so the relaxation is largely about domestic scale.

This matters because gold loans remain a branch-first product in many regions. The process still depends on in-person appraisal, collateral handling and quick turnaround at the counter. When branch additions slow, growth slows. When the gate opens, lenders can chase demand pockets faster, particularly in districts where formal credit options are thinner.

Here is a quick snapshot of what the rule change intersects with.
 

The bigger picture becomes clearer. The easing comes when demand for gold-backed credit is rising, helped by high gold prices and tighter lending conditions in parts of unsecured credit. 

Reuters recently reported Muthoot Finance’s gold-loan momentum, with loan AUM up 51% year-on-year to ₹1.48 trillion, and a raised FY2026 gold-loan growth forecast of 30%–35%. 

What Led To This Point?

The gold-loan market has been building up to an expansion phase for months. A Times of India report said NBFCs are planning around 3,000 new branches in the next year as demand for gold-backed loans jumps. That scale of rollout is difficult if approvals are required repeatedly for already-large networks. 

At the same time, company performance and investor reactions show why the sector wants speed but also why scrutiny stays high. Reuters reported that Muthoot Finance’s quarterly profit nearly doubled to ₹26.56 billion for the quarter ended 31 December 2025, supported by demand and high gold prices. A day later, Reuters noted the stock slid sharply as investors questioned durability, pointing to ₹6.4 billion of one-time recoveries and softer operational markers like a 1% decline in active customers. This is exactly where “precision” regulation is expected to balance growth with watchfulness. 

Also in the background, industry narratives have been widening beyond jewellery traders. LoansJagat, in its 30 September 2025 report, highlighted regulatory changes that broadened gold-backed lending access for more businesses and tweaked related loan rules. It shows the direction of travel: expand formal, secured credit while tightening process discipline.

What Stakeholders Are Saying?

Stakeholder reactions are already visible in market coverage. NDTV Profit reported Morgan Stanley’s view that removing the approval requirement is a clear positive because the prior process has been a bottleneck for large players running aggressive branch rollout plans. 

Business coverage has also framed the move as enabling quicker credit delivery while shifting focus to risk management and governance.

Conclusion

If the easing stays on track, gold-loan NBFCs with large networks can expand faster and compete harder in high-demand districts. The industry, though, will still be judged on asset quality, customer outcomes and clean growth.