Loan Against Gold and Silver: What RBI's 2026 Rules Mean for You

Loans against gold jewellery have long been one of India's quickest sources of credit. RBI has now brought gold and silver under one rulebook: the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025, issued on 6 June 2025, amended on 29 September 2025, and in force for all lenders by 1 April 2026.

What can be pledged

• Gold and silver jewellery and ornaments
• Gold and silver coins minted by banks (within weight limits)

Lenders cannot lend against primary gold or silver such as bars and bullion, or against gold or silver ETFs and mutual fund units under these rules. Total pledged collateral is capped per borrower: 1 kg for gold ornaments and 10 kg for silver ornaments.

How much you can borrow

For consumption loans, the maximum loan-to-value (LTV) ratio depends on the loan size:

The value is based on the metal's purity and weight only. Stones, gems and other non-metal components are excluded.

Borrower protections

• Valuation and assaying must happen in your presence, following a standard process.
• The loan documents must spell out the valuation, LTV, charges and auction terms.
• After full repayment, the lender must return the jewellery on the same day, or within seven working days. If it is late, the lender owes you compensation.
• If the jewellery has to be auctioned, the lender must give you notice first, and the reserve price is regulated.

When it suits you

• Urgent, short-term needs where speed matters
• Borrowers without a strong credit history, since the loan is secured
• Bullet-repayment or EMI options for planned expenses

What to watch

• Interest is often higher than for loans against mutual funds or securities. Compare the effective cost, including fees.
• If gold or silver prices fall, the lender may ask you to repay part of the loan or add collateral.
• Missing payments can lead to an auction of jewellery that may have family value. Borrow only what you can repay.

SERNET can help you arrange a loan against gold or silver through partner lenders. Valuation, sanction and terms rest entirely with the lender.