Delhi: The Reserve Bank of India (RBI) has opened a new chapter in household lending for everyone. Starting April 1, 2026, banks and NBFCs can officially issue loans against silver, under the Lending Against Gold and Silver Collateral Directions, 2025.
This means borrowers can now pledge silver ornaments or coins (up to 500 grams) to raise funds or a loan, something that was earlier restricted only to gold. With both metals now part of one unified lending policy, the big question is simple: Which works better for small borrowers — gold or silver?
Silver Steps Into India’s Credit Market
Until now, gold loans have dominated India’s small-ticket lending market. As per RBI data, gold loans accounted for ₹1.42 lakh crore in outstanding credit as of March 2025, growing at over 22% annually since 2020. Silver, however, never entered the formal lending space despite India being one of the largest consumers of silver in the world. Approx. 25% of the worldwide demand in 2023.
In 2024, India imported approximately 7,669 tonnes of silver, more than double the volume of 2023 itself.
With such massive inflows, this untapped metal now represents a new lending opportunity for indians. RBI’s new direction could transform how families, especially in smaller towns, use silver savings as formal collateral. In India, silver purchasing is way higher than gold itself.
Key Differences: Gold vs Silver Loan Rules (RBI Framework)
| Feature | Gold Loan | Silver Loan (From April 2026) |
|---|---|---|
| What You Can Pledge | Gold jewellery and coins (up to 50 grams) | Silver jewellery and coins (up to 500 grams) |
| What’s Not Accepted | Gold bars, bullion, or ETFs | Silver bars, bullion, or ETFs |
| How Much You Can Use | No fixed weight limit — depends on purity and value | Up to 10 kilograms of silver ornaments per borrower |
| Loan-to-Value (LTV) | Up to 90% of the gold’s market value | Up to 85% of the silver’s assessed value |
| Typical Loan Amount | ₹1–3 lakh, depending on the jewellery pledged | ₹50,000–₹2 lakh, depending on purity and weight |
| Interest Rates | Usually between 8% and 13% | Expected between 9% and 14% in early rollout |
| Purity Requirement | Only BIS-hallmarked gold is accepted | Only BIS-hallmarked silver will qualify |
| How It’s Valued | Based on either the 30-day average or the previous day’s gold rate — whichever is lower | The same valuation method applies to silver |
| When the Rule Applies | Already in effect | Starts April 1, 2026 |
Why Silver Loans Could Be a Game Changer
Unlike gold, silver is more common in small-town households. Even in most indian festivals or weddings, most people gift silver to each other. In many regions of Gujarat, Rajasthan, Tamil Nadu, and Uttar Pradesh, silver is the preferred form of savings for low- and middle-income families.
The RBI’s move means these families can now access short-term credit without selling their silver assets, helping them handle emergencies, farm expenses, or seasonal business needs.
A borrower pledging silver worth ₹1 lakh could get ₹75,000–₹85,000, depending on purity and market rate. Repayment terms will range from 3 months to 3 years, similar to existing gold loan products.
EaseMoney Analysis: Cost, Risk, and Reach
| Metric | Gold Loan | Silver Loan (Expected) | EaseMoney Insight |
|---|---|---|---|
| Collateral Stability | High — gold prices fluctuate 8–10% annually | Moderate — silver prices can swing 20–25% | Silver’s volatility may push lenders to keep higher interest spreads |
| Storage & Insurance Cost | ₹25–₹40 per ₹1 lakh loan | ₹60–₹80 per ₹1 lakh (due to bulkier volume) | Smaller NBFCs may struggle to manage vault storage |
| Loan Processing Time | 2–6 hours | 6–12 hours (expected) | Silver needs more purity checks; digital models can speed this up |
| Default/NPA Rate (FY25) | 1.5% (NBFC gold loans) | Not yet launched | Slightly higher in initial year due to new process |
| Market Penetration (Rural India) | 62% households own gold | 78% households own silver (NCAER 2024) | Silver loans can reach deeper into low-income segments |
| Expected Loan Market by FY27 | ₹1.6 lakh crore | ₹25,000–₹30,000 crore (potential) | Silver loans could expand secured small-loan access by ~20% |
The metal is no longer just a festive ornament — it’s becoming a formal financial asset. If even 10% of this silver enters the lending system, it could unlock ₹30,000 crore in new rural credit within the first year.
As per the data and insights, the expectation after April 2026 of the market is that gold loans will continue to dominate in value, but silver loans will lead in reach. Together, they could reshape how India borrows, saves, and grows.
Archive – RBI Approves Silver Loans from April 2026: Key Rules, LTV, and Process
