We’ve long seen banks offer easy loans against gold, but now the Reserve Bank of India (RBI) is adding a new sparkle – loans against silver. With the “Lending Against Gold and Silver Collateral Directions, 2025” coming into effect on April 1, 2026, borrowers can soon pledge their silver ornaments and coins for quick cash, just like gold.
Who Can Lend and Who Can Borrow
Under the new norms, commercial banks, small finance banks, regional rural banks, co-operative banks, NBFCs and housing finance companies can all extend loans against silver. However, loans against bullion (primary silver or gold) or financial assets like ETFs or mutual funds are not allowed. Only jewellery, ornaments and coins qualify.
How Much You Can Pledge
The RBI has set clear limits:
- Gold ornaments: Up to 1 kg
- Silver ornaments: Up to 10 kg
- Gold coins: Up to 50 g
- Silver coins: Up to 500 g
The loan tenure for bullet repayment-style loans can’t exceed 12 months.
Loan-to-Value (LTV) Ratio
The amount you can borrow depends on the LTV ratio:
- Up to ₹2.5 lakh – 85%
- ₹2.5–5 lakh – 80%
- Above ₹5 lakh – 75%
This means for every ₹100 worth of silver, you can get up to ₹85 as a loan.
Valuation & Transparency
Valuation will be based on the lower of the last day’s or 30-day average price, as published by IBJA or a SEBI-regulated commodity exchange. Only the intrinsic metal value counts gems or stones are excluded.
Borrowers must be present during valuation, receive a certificate, and all loan documents must be in their preferred language.
Collateral & Auction Rules
Collateral will be stored in secured vaults, with surprise audits for safety. Once a loan is repaid, silver or gold must be returned within 7 working days or lenders pay ₹5,000 per day for delays.
If the borrower defaults, lenders can auction the pledged items, but only after proper notice and at a reserve price of at least 90% of current value.
With these detailed norms, the RBI has not just expanded access to credit but also ensured trust, transparency, and accountability proving that silver too, can now shine as collateral.