New Delhi, June 3 -- Reserve Bank of India (RBI) recently changed the gold loan rules, according to which the borrower will be required to submit the ownership proof at the time of raising funds against the jewels. The lenders should also ensure that the loan to value (LTV) ratio does not exceed 75 percent of value including interest accrual.

However, the LTV rules will come into effect for the loans which are above Rs.2 lakh of value.

Loan to value (LTV) ratio is the percentage of value of gold which lenders are willing to give as loan. For instance, when the value of loan is Rs.1 lakh and LTV ratio is 70 percent, then the maximum loan one can avail is of Rs.70,000.

LTV is an important metric used at the time of determining the loan a...