RBI Introduces New Rules for Gold and Silver Loans: Full Details on Limits, LTV Ratio, and Guidelines

Today, I’ll tell you two important things about gold and silver. One is about their prices, and the other is about loans. You already know that in October, gold and silver broke all previous records. But with time, some changes have come to that trend.

Let’s first talk about loans. Silver prices go up and down very often — it’s much more volatile than gold. Now, the Reserve Bank of India (RBI) has brought guidelines for giving loans not only against gold but also silver.

You must have seen and heard many ads about gold loans on TV — where people pledge their gold to get money from banks. But have you ever heard a silver loan jingle? Probably not. But now you might, because the RBI has issued a new circular called “Reserve Bank of India Lending Against Gold and Silver Directions, 2025,” which will come into effect from April 1, 2026.

This circular gives clear guidelines for taking loans against gold and silver. There are also some new changes in gold loan rules, and silver loans are being introduced for the first time — which will make borrowing against silver easier.

According to the new rules, commercial banks, small finance banks, regional rural banks, urban and rural cooperative banks, NBFCs, and housing finance companies will be able to offer both gold and silver loans.

However, the RBI has banned loans against bullion (raw gold or silver) because it involves higher financial risks. That means loans will only be allowed on gold and silver jewelry, coins, or ornaments — not raw metals.

For gold ornaments, the limit is up to 1kg, and for silver ornaments, it’s up to 10 kg. For gold coins, the limit is 50 grams, and for silver coins, it’s 500 grams.

Now, Let talk about Loan-to-Value (LTV) ratio that means how much of a loan you can get based on the value of the gold or silver you pledge.

• For loans up to ₹2.5 lakh you can get up to 85% of the value.
• For loans between ₹2.5 lakh to ₹5 lakh, you can get up to 80%.
• For loans above ₹5 lakh, you can get up to 75% of the value.

The value will be based on the average price in the last 30 days or the previous day’s closing price, whichever is lower. The value of gems will not be added.

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The borrower will get a copy of the valuation certificate, and all communication will be in their local or preferred language.

The pledged gold or silver will be kept safe in a secure vault by the bank’s staff. Once the loan is fully repaid the bank must return the pledged items within 7 working days. If they delay the bank will have to pay ₹5,000 per day as compensation.

If the borrower fails to repay the bank will first send a notice and then auction the gold or silver if needed. The reserve price for the auction can’t be less than 90% of the current value, and if two auctions fail, it can go down to 85%.

If the gold or silver remains unclaimed for 2 years after loan repayment it will be considered unclaimed property but the bank must try to contact the borrower or their heirs first.