Gold Silver Loan: Last week, the Reserve Bank of India (RBI) changed 8 rules related to gold loans, including increasing the LTV ratio. The purpose of the new rules is that people get loans easily and banks and NBFCs work in a transparent manner. RBI’s revised rules will apply to all commercial banks, NBFCs, cooperative banks and housing finance companies. This will reduce paperwork in gold loans and if the loan is repaid, the gold will also be returned quickly. These new rules will come into effect from April 1, 2026. The old rules will be applicable on loans taken before this.
There has been a change in these rules for gold loans
1 LTV Ratio: RBI has increased the LTV ratio for home loans less than Rs 2.50 lakh from 75 percent to 85 percent. This allows customers to take a loan up to 85 percent of the value of gold.
2 Credit check: According to the new rules, income proof will not be asked for loans up to Rs 25 lakh and credit score will not be checked. People with low income will be able to get loans easily.
3 Bullet Repayment: For customers who take bullet repayment loan, a time limit has been set for repaying it. In bullet repayment loan, the entire principal and interest have to be repaid together at the end. It will be mandatory to repay it in 12 months.
4 Limit for pledging gold and silver
Item — Maximum limit
Gold jewellery — 1 kg
Gold coins — 50 gm
Silver jewellery — 10 kg
Silver coins — 500 gm
(Limit per customer across all branches)
5 Compensation: After the loan is closed, the gold or silver must be returned on the same day or within a maximum of 7 working days. If there is a delay, the bank will have to pay a compensation of Rs 5,000 to the customer for each day.
6 In case of theft: If the pledged gold or silver is lost or damaged due to any fault of the bank, full compensation will be given to the customer.
7 Auction: If the customer is unable to repay the loan and the bank auctions the gold, a notice will have to be given before the auction. The reserve price will not be less than 90 percent of the market price. The bank will return the remaining amount in the auction to the customer within 7 days.
8 Simple language: Loan terms and valuation information will be given in the customer’s local language. If the customer is illiterate, the information will be given in the presence of a witness.