New Delhi, March 30 -- A recent report by Fitch Ratings has flagged heightened risks in India's gold-loan segment following a decline in gold prices, underscoring the need for robust risk controls among non-bank financial institutions (NBFIs).

In its latest assessment, Fitch said that falling gold prices could erode the value of collateral backing gold loans, potentially weakening lenders' recovery prospects in the event of borrower defaults. "A decline in gold prices puts pressure on collateral coverage and increases the importance of active risk management," the agency noted.

Gold prices have lost about 15% so far this month, marking its steepest monthly fall since October 2008, pressured by a stronger US dollar, which has gained more...