New Delhi: In a move aimed at widening access to credit, the Reserve Bank of India (RBI) has announced that individuals will soon be able to obtain loans against silver, much like existing gold loan facilities. The new guidelines, which take effect from April 1, 2026, will allow borrowers to use silver jewellery and coins as collateral to meet their financial needs.
According to the circular issued by the RBI, banks and financial institutions will now be permitted to extend loans backed by silver ornaments and coins. The facility will be available through commercial banks, cooperative banks, small finance banks, and other regulated lenders. The initiative is expected to particularly benefit individuals in rural and semi-urban areas, where silver is commonly held as an asset.
Key details of the silver loan policy
Under the new framework, borrowers can pledge up to 10 kilograms of silver to avail loans. In comparison, gold loan regulations currently permit up to 1 kilogram of gold to be pledged. Additionally, silver coins weighing up to 500 grams can also be used as collateral.
However, the RBI has clarified that silver bars, bricks, or silver-based investment products such as ETFs and mutual funds will not qualify under the scheme. Only physical silver items — specifically jewellery and coins — will be accepted.
Loan value and repayment norms
Borrowers pledging silver worth ₹2.5 lakh can avail loans of up to 85% of the asset’s value, while for silver valued at ₹5 lakh, the loan-to-value (LTV) ratio will be capped at 75%. Once the loan is fully repaid, lenders are required to return the pledged silver or gold within seven working days. Any delay beyond this period will attract a penalty of ₹5,000 per day.
In the event of a default, banks and financial institutions will have the authority to liquidate the pledged silver or gold to recover the outstanding dues.
The RBI’s decision to expand collateral-based lending to include silver aims to improve liquidity options for households and small businesses, offering them a new way to leverage their assets during financial emergencies.
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