RBI has issued guidelines for Silver Loans. From April 1, 2026, banks, NBFCs, and co-operative banks will provide loans against silver. Loans will be available on up to 10 kg of Silver Jewellery and up to 500 grams of Silver Coins. Loan-to-Value (LTV) and procedures are determined.
RBI Silver Loan: The Reserve Bank of India has made a significant decision, now permitting loans against silver. Similar to gold loans, people will now be able to obtain Silver Loans. For this purpose, the RBI has issued the Gold and Silver (Loans) Directions, 2025, which will come into effect from April 1, 2026. This decision is considered a major relief, especially for rural and middle-class segments, as silver often serves as a primary asset for many families.
Who will provide Silver Loans
According to the new guidelines, several financial institutions will now offer silver loans. These include:
Commercial Banks, Small Finance Banks, Regional Rural Banks, Urban and Rural Co-operative Banks, as well as NBFCs and Housing Finance Companies. This means a large number of people will now be able to easily get cash by pledging silver.
What items will be eligible for a loan
The new policy clearly states which items will be eligible for a loan.
- Up to a maximum of 1 kg for Gold Jewellery,
- Up to a maximum of 10 kg for Silver Jewellery,
- Up to 50 grams for Gold Coins,
- Up to 500 grams for Silver Coins.
However, loans will not be provided against bullion (i.e., pure gold, pure silver), Gold ETFs, or Mutual Funds.
How much loan will be available — Loan-to-Value Ratio
The loan amount will be determined based on the value of your ornaments.
- Up to 85% for loans up to INR 2.5 lakhs,
- Up to 80% for loans between INR 2.5 lakhs and INR 5 lakhs,
- Up to 75% for loans above INR 5 lakhs.
For example, if you have silver worth INR 1 lakh, you could get a loan of up to INR 85,000.
How will the value be determined
Banks or NBFCs will consider the average closing price of the last 30 days or the previous day's price (whichever is lower) as the standard. Prices will be sourced from IBJA or recognized commodity exchanges to ensure transparent valuation.
Loan Process and Security
The valuation of ornaments will be conducted in the customer's presence. All documents will be provided in the customer's local language. Pledged ornaments will be kept in the bank's secure vault and regular inspections will also be carried out.
Return of ornaments after loan repayment
The RBI has clarified that banks must return the ornaments within 7 working days of loan repayment. If the delay is due to the bank's fault, the bank will have to pay compensation of INR 5,000 per day.
If the customer does not repay the loan on time, the bank will send a notice. The auction process will begin one month later. The reserve price for the auction will not be less than 90% of the market value, and if the auction fails twice, it can be reduced to 85%.
If the customer does not claim the ornaments for 2 years after repaying the loan, the bank will declare them as ‘unclaimed collateral’ and launch a special campaign to contact the customer or their heirs.
