🧭 Introduction
The Reserve Bank of India (RBI) has issued new guidelines permitting loans against silver ornaments and coins, bringing silver into the formal lending ecosystem alongside gold. Under the “Lending Against Gold and Silver Collateral Directions, 2025”, this change will take effect from 1 April 2026 and is expected to expand credit access for households and small businesses.
💡 Key Highlights
- Loans against silver jewellery or coins will now be officially recognised by banks, NBFCs and co-operative banks.
- Maximum pledge limits: up to 10 kg silver ornaments or 500 g silver coins per borrower.
- Loan-to-value (LTV) ratio set at 85% for ≤ ₹2.5 lakh, 80% for ₹2.5-5 lakh, and 75% for > ₹5 lakh as collateral value.
- Silver bullion (bars/bricks) and gold/silver backed financial assets (ETFs/MFs) are excluded from eligibility.
📊 Table: Silver Loan Rules at a Glance
| Rule | Details |
|---|---|
| Eligible collateral | Silver jewellery, ornaments, coins |
| Excluded collateral | Silver bullion; ET / MF units backed by silver |
| Maximum pledge weight | Silver ornaments ≤ 10 kg Silver coins ≤ 500 g |
| LTV Ratios | ≤ ₹2.5 lakh → 85% ₹2.5-5 lakh → 80% > ₹5 lakh → 75% |
| Effective date | 1 April 2026 |
| Valuation method | Lower of 30-day avg closing price or previous day’s price, based on IBJA or SEBI-regulated exchange. |
🧠 Why This Matters
This move by the RBI aims to broaden formal credit access, especially for borrowers who hold silver (a common household asset) and may have relied on informal lenders. It brings transparency, standardisation in valuation and collateral handling, and strengthens financial inclusion. For lenders, it means new collateral classes with defined limits and risk controls. For borrowers, it opens another route for short-term credit against their existing assets.
🔍 What Should You Do
- If you own silver jewellery or coins and consider using it for a loan, check whether your bank or NBFC is preparing for these rules.
- Understand the valuation methodology used (the scheme says only intrinsic silver value counts, not decorative stones) and ask for the valuation certificate.
- Ensure you read all terms: fees, release process (collateral must be returned within 7 working days after repayment) and conditions for default.
- Keep in mind this change is effective from April 2026 – until then, existing lender practices remain as per older rules.
🧩 Conclusion
The RBI’s decision to include silver as eligible collateral marks a significant step in making precious-metal-backed loans more inclusive and regulated. While gold loans have been around for years, silver now joins as a mainstream option — but with rules, limits, and safeguards. For everyday investors and households, this means smarter access to credit; for banks and NBFCs, it means structured risk and better asset utilisation.
Stay tuned to KnowledgeBurst.in for more updates as banks start rolling out silver-loan products and the financial landscape evolves.
Multiple news sources: @mathrubhumi+2The Economic Times+2, Upstox – Online Stock and Share Trading, adda247+1, The Economic Times+1