The increase in loan-to-value (LTV) ratio for gold loans, or the quantum of borrowing against a given quantity of the precious metal, will heighten credit risks for banks, a ratings agency said on Friday. The RBI had on Thursday increased the LTV ratio for gold loans by banks to 90 per cent from the earlier 75 per cent, in a bid to make money available to people affected by the coronavirus pandemic. “…an increase in the LTV ratio to 90 per cent increases the credit risk for banks as the collateral available in the form of gold ornaments or jewellery may not be sufficient to fully cover both principal and interest components on these loans,” Brickworks Ratings said.