Archive · 14 Nov 2025
RBI Sets New Rules for Loans Against Silver, Effective April 2026
Starting April 1, 2026, people in India can get loans by using their silver jewelry or coins as collateral, similar to how gold loans work.
The Reserve Bank of India is introducing these new rules to make borrowing with silver safer and fairer.
The amount you can borrow depends on the silver's value, with limits ranging from 75% to 85% of its worth.
To determine the value, banks will use the lower price from the past month or the previous day.
Any gemstones or other metals in the jewelry won't be counted, only the silver.
If you pay back your loan, the bank must return your silver within seven days.
If the bank is late, they might have to pay you compensation.
If you can't repay the loan, the bank can sell your silver, but not for less than 90% of its market price.
Starting April 1, 2026, loans will be permitted against silver jewellery and coins.
Loan-to-Value (LTV) limits range from 75% to 85% based on the loan amount.
Silver value will be assessed using the lower of the last 30 days' average price or the previous day's closing rate.
Gemstones and other metals in jewellery will not be included in the valuation.
Pledged silver must be returned within seven working days of loan repayment, with compensation for delays.
- Who
- The Reserve Bank of India (RBI)
- What
- Introduced new regulations allowing loans against silver jewellery and coins, setting Loan-to-Value (LTV) limits, and establishing rules for valuation, return, and auction of pledged items.
- When
- Starting April 1, 2026
- Where
- India
- Why
- To make the precious metal loan market more transparent and regulated, ensure fair value for ornaments, and facilitate timely return of pledged items, thereby bringing more borrowers into the formal credit system.
- Effective Date
- April 1, 2026
- Eligible Collateral
- Silver jewellery and coins (excluding bullion, bars, ETFs, or mutual funds)
- Applicable Institutions
- Commercial banks, Small Finance Banks, Regional Rural Banks, Urban and rural co-operative banks, NBFCs, Housing Finance Companies
- Loan-to-Value (LTV) Ratios
- Up to 85% for loans <= Rs 2.5 lakh, 80% for loans Rs 2.5-5 lakh, 75% for loans > Rs 5 lakh
- Silver Valuation Method
- Lower of the last 30 days' average price or previous day's closing rate (sourced from IBJA or recognized commodity exchange). Gemstones/other metals not valued.
- Return of Pledged Items
- Within 7 working days of loan repayment
- Compensation for Delay
- Rs 5,000 per day for bank-caused delays in returning items
- Auction of Unpaid Items
- At a price not below 90% of market value
