Can You Now Get a Loan Against Silver? Here’s What the RBI Say

The Reserve Bank of India (RBI) has taken a major step by allowing people to take loans against silver jewellery and coins, similar to how gold loans work. The new policy, named the “Lending Against Gold and Silver Collateral Directions, 2025”, will come into effect from April 1, 2026, opening up new credit opportunities for individuals, especially in rural and semi-urban areas where silver is commonly owned.

Can You Now Get a Loan Against Silver?

Yes, from April 2026, you’ll be able to get a loan against silver in India under the RBI’s new framework. The guidelines ensure fair valuation, borrower safety, and formal banking participation, marking a significant milestone in India’s lending landscape.

What’s New in the RBI Guidelines?

• Borrowers can now pledge up to 10 kg of silver ornaments or up to 500 grams of silver coins as collateral.

• The loan-to-value (LTV) ratio will depend on the amount borrowed:

  • Up to ₹2.5 lakh – 85% LTV

  • ₹2.5 to ₹5 lakh – 80% LTV

  • Above ₹5 lakh – 75% LTV

• The rules apply only to physical silver jewellery and coins. Silver bars, bullion, or silver-backed financial products like ETFs won’t be accepted.

• The valuation of silver will be based on the average market price of the last 30 days as per the India Bullion and Jewellers Association (IBJA).

Why This Move Matters

This move expands access to credit for millions of Indians who own silver but lack gold holdings. Traditionally, only gold could be used for collateral loans, but with these guidelines, people can now leverage their silver assets for short-term financial needs. It’s expected to reduce dependence on local pawnbrokers and bring more borrowers into the formal banking system.

Important Rules You Should Know

• Borrowers must be present during the testing and valuation of silver.

• Once the loan is repaid, the lender must return the pledged silver within seven working days, or face a daily penalty.

• In case of non-payment, the silver may be auctioned, but borrowers will receive prior notice, and the auction must follow RBI-set price guidelines.

• Lenders are required to issue a proper valuation certificate and maintain transparency in every transaction.

Impact on Borrowers and the Economy

By officially recognizing silver as loan collateral, the RBI is aiming to make small-value secured loans more accessible. This is expected to benefit farmers, small traders, and middle-income households who often rely on silver ornaments as savings. The regulation also ensures fair valuation and borrower protection, minimizing the risk of exploitation in unregulated lending setups.