Silver Loan Scheme from April 1, 2026: RBI Allows Loans Against Silver Jewellery, Sets New Rules for Banks and NBFCs

From April 1, 2026, Indians will be able to take loans by pledging silver jewellery — not just gold. The Reserve Bank of India (RBI) has issued new Standard Lending Guidelines that expand the scope of secured lending and bring silver under the loan collateral category for the first time in India’s banking history.

Silver Now Eligible for Loans

Until now, most banks and NBFCs only accepted gold jewellery as collateral for loans. However, with this new guideline, silver ornaments, coins, and household jewellery will also be eligible for loans.

According to the RBI circular issued on June 6, the new rules aim to increase transparency, ensure borrower protection, and standardize lending practices across commercial banks, NBFCs, cooperative banks, and housing finance institutions.

However, the central bank has restricted loans against silver bars or bullion, to prevent speculative trading and market manipulation.

Why This Move Matters

Experts believe this policy change is a major step towards financial inclusion, especially for rural and low-income households. Silver is more affordable than gold, which means a larger population can now use their existing assets to secure emergency funds, education loans, or small business financing.

This move is expected to benefit millions who own silver jewellery but couldn’t previously use it as collateral.

Loan Limits Set by RBI

The RBI has also defined clear loan limits based on the type of metal and item:

• Gold jewellery: Up to 1 kilogram

• Gold coins: Up to 50 grams

• Silver jewellery: Up to 10 kilograms

• Silver coins: Up to 500 grams

These limits will apply collectively across all branches for a single borrower.

While interest rates on silver loans may be slightly higher than gold loans due to higher price volatility, banks are expected to offer competitive rates as the market develops.

Strict Safety and Repayment Rules

To protect borrowers, the RBI has introduced strict security and repayment conditions:

• The pledged gold or silver must be returned within 7 working days after loan repayment.

• If a delay occurs, the bank must pay a penalty of ₹5,000 per day.

• In case of loss or damage of pledged items, the lender is fully liable for compensation.

• Before auctioning collateral, the borrower must receive prior notice, and the reserve price must be at least 90% of the market value.

• Loan terms and conditions must be explained in the borrower’s local language. If the borrower is illiterate, a neutral witness must be present during the explanation.

A Step Towards Financial Empowerment

By including silver in secured lending, the RBI aims to make credit more accessible and reduce dependency on unregulated moneylenders, especially in rural India. This decision also comes as part of RBI’s effort to broaden asset-backed lending options and bring uniformity to gold and silver loan markets.

With this policy coming into effect on April 1, 2026, millions of Indian households may soon find their silver ornaments turning into a financial safety net, strengthening both credit access and trust in formal banking systems.