Typically, most public sector banks maintain a loan-to-value ratio of 70 per cent, while it is higher for some private-sector lenders.
Top executives of government banks said they had already reduced the amount they used to lend per gram of pure gold.
"The amount of loan is dependent on how much pure gold is available with the borrower. Earlier, for 1 g, we used to lend Rs 2300. We have reduced it to Rs 1700. We will also review the loan-to-value (LTV) ratio," a senior banker said.