RBI to Allow Loans Against Silver from April 2026
Maximum 85% loan-to-value (LTV) for smaller loans, 80% for mid-range, and 75% for high-value loans
Nov 17, 2025 - The Reserve Bank of India (RBI) has made a major announcement, marking a reform in loans against precious metal. Under the Reserve Bank of India (Gold and Silver Loans) Directions, 2025, from April 1, 2026, people will be able to take loans from banks and financial institutions by pledging silver jewellery and coins. The rule applies to NBFCs, commercial banks (including small finance and regional rural banks), urban and rural co-operative banks and housing finance companies.
As per this new rule, the Central Bank has set three Loan-To-Value (LTV) limits:
- For loans up to Rs 2.5 lakh, up to 85% of the total silver value will be granted.
- For loans between Rs 2.5 lakh and Rs 5 lakh, up to 80% of the silver value will be granted.
- For loans above Rs 5 lakh, up to 75% of the silver value will be granted.
For example, a loan given on Rs 1 lakh worth of silver will be a maximum of Rs 85,000.
For calculating the loan, the silver price on the India Bullion and Jewellers Association (IBJA) will be considered — the 30-day average price or the previous day's closing price, whichever is lower.
The RBI has also directed that after the loan is fully repaid or settled, the bank or institution must return the jewellery within seven working days. In case of delay by the lender, the customer will be compensated at Rs 5,000 per day. In case of default by the borrower, the lender can auction the pledged silver but only at a price not below 90% of its market value. If the borrower does not claim the pledged item for more than two years, then it will be marked as “unclaimed”. However, before taking any action, the banks must make all efforts to trace the owner.
The RBI has further clarified that this new rule is only for loans against silver jewellery and coins. Loans against primary silver, such as bullion - pure gold or silver ingots or their associated financial assets such as gold ETFs or Mutual Fund units – will not be allowed.
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