New Delhi, Nov. 13 -- The Reserve Bank of India's (RBI) recent gold loan norms have plugged a loophole that allowed banks and non-bank financiers to lend against gold repledged by informal lenders, according to four bankers with knowledge of the matter.

The bankers said that these are loans given to pawn brokers against gold that these brokers have taken as collateral from their own customers in the first place. The RBI, the bankers said, has now said that repledging of gold is not allowed and, therefore, lenders that made such loans will not be able to renew them.

These bankers who spoke on the condition of anonymity said that the practice of lending against repledged gold was not confined to a single lender. However, they said that th...