Silver Rules: Up until now, most folks have been using gold as collateral for loans, but starting April 1, 2026, they’ll also be able to use silver. Just like with gold, people can take out loans against silver. The Reserve Bank of India (RBI) rolled out new lending guidelines on June 6, aimed at boosting borrower safety, enhancing transparency, and holding banks and finance companies accountable.
Now, commercial banks, non-banking financial institutions (NBFCs), cooperative banks, and housing finance companies can offer loans against silver jewelry, coins, and ornaments. However, loans against silver bars or bullion won’t be allowed to avoid speculation.
So, why is this rule a big deal?
Experts believe this is a huge relief for rural and low-income individuals. Since silver is more affordable than gold, more people can use it to secure funds for emergencies or business ventures.
What loan amounts can you expect?
Gold jewelry: up to 1 kg
Gold coins: up to 50 grams
Silver jewelry: up to 10 kg
Silver coins: up to 500 grams
These limits apply to borrowers across all branches combined.
That said, the interest rate on silver loans might be a bit higher than on gold loans due to the fluctuating prices of silver.
RBI has set some strict security rules
Once the loan is repaid, the pledged silver or gold needs to be returned on the same day or within a maximum of seven working days. Any delays will incur a penalty of Rs 5,000 per day. If the pledged item gets lost or damaged, full compensation is required. A notice must be given before any auction, and the reserve price should be at least 90% of the market value. All terms must be communicated in the borrower’s local language, and if the borrower can’t read, they need to be explained in front of an independent witness.
