Delhi ~ The Reserve Bank of India (RBI) has allowed banks and NBFCs to offer loans against silver from April 1, 2026. This is part of the new Lending Against Gold and Silver Collateral Directions 2025, which unifies lending norms for both metals under a single policy. After April, Borrowers can take a loan on up to 10 Kg of silver jewellery at the household OR 500 grams of coins as collateral.
This move makes India’s collateral framework more diversified beyond just gold loans. The RBI issues this notification to enhance credit access for farmers, MSMEs, and individuals amid rising silver prices.
Silver Joins Gold as Loan Collateral
For the first time, silver will be treated like gold when it comes to loans. Until now, banks have accepted only gold ornaments and coins as security. The new move means families that keep their savings in silver can now use them to borrow money in a regulated and transparent way. without selling their assets.
The RBI said the change will help expand access to small loans, especially in semi-urban and rural areas where silver is more common than gold.
Key Loan Rules and Limits
| Feature | Details |
|---|---|
| Eligible Items | Silver jewellery, ornaments, and coins (up to 500g) |
| Not Allowed | Silver bars, bullion, or ETFs |
| Maximum Silver Limit | 10 kg of silver ornaments per borrower |
| Maximum Loan-to-Value (LTV) | 85% for loans up to ₹2.5 lakh |
| LTV for Larger Loans | 80% (₹2.5–₹5 lakh), 75% (above ₹5 lakh) |
| Valuation Method | Lower of 30-day average price or previous day’s market rate |
| Implementation Date | April 1, 2026 |
Only hallmarked silver will be allowed, and all sold items must be securely stored and insured by lenders.
Hallmarked silver, in simple words, it’s certified for purity by the Bureau of Indian Standards (BIS). Popular BIS-hallmarked silver brands such as Tanishq, Malabar Gold & Diamonds, PNG Jewellers, Kalyan Jewellers, and Senco Gold & Diamonds.
How the Silver Loan Will Work
After the Implementation, you can apply via the online portal or just visiting the Branch, depending on the bank or NBFC.
- Application: Customers can start online, book a meeting, or visit a branch.
- Valuation: The silver is weighed and purity-tested.
- Loan Sanction: Lenders offer 75–85% of the assessed value.
- simple example, silver worth ₹1 lakh can fetch a loan of ₹75,000–₹85,000.
- Disbursement: Once KYC and paperwork are complete, the amount is credited directly—often within hours.
- Repayment: Loan tenure ranges from 3 months to 3 years, with interest rates between 9% and 14%, similar to gold loans.
Some lenders plan hybrid models where customers initiate the process digitally and complete valuation through authorised collection centres.
What It Means for Borrowers
The decision could benefit millions of households, traders, and farmers who hold silver as savings. Since silver is more affordable and widely owned than gold, this step makes access to small-ticket credit easier and safer.
India’s Growing Silver Story
- India is one of the world’s largest silver consumers. As per the reports in 2018, the country imported around 5,677 tonnes of silver in just 2017.
- Between 2010 and 2024, incremental demand for silver bars and coins got 840 million ounces (approx 26,000 tonnes).
- Analysts say investment in silver continues to rise, especially during periods of price volatility.
- Indian festivals like Diwali, the most selling period of silver in india.
After Silver for collateral, the RBI’s move not only broadens financial inclusion but also turns one of India’s most traditional savings assets into a formal, productive source of credit.
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