RBI Expands Collateral Options: Silver Joins Gold for Bank Loans
RBI Silver Loans: Gold and silver prices are hitting record highs. Until now, banks only gave loans against gold, but from now on, you can also get loans against silver. The Reserve Bank of India (RBI) has introduced new rules for these loans.
Bank loans on silver: RBI's key decision
Good news from the RBI! Soon, you can get loans against silver, just like gold. New rules allow banks, NBFCs, and finance companies to accept silver as collateral from April 1, 2026.
Loans for farmers and small companies
RBI says those eligible for collateral-free loans up to Rs 2 lakh in agriculture/MSME can voluntarily pledge silver. Banks can't force them. The limit was raised from Rs 1.6 lakh in Dec 2024.
How much loan can you get on silver in banks?
RBI set the Loan-to-Value (LTV) for silver: 85% for loans up to Rs 2.5 lakh, 80% for Rs 2.5-5 lakh, and 75% for over Rs 5 lakh. You can pledge up to 10 kg of jewelry or 500g of coins.
No loans for bullion
No loans on silver bars, ETFs, or mutual funds. Loans are only for jewelry and coins. You can pledge silver for working capital. Tier 3 & 4 urban co-op banks can also offer these loans.
Strict control over silver storage, auction, and transparency
- Borrower must be present during inspection.
- Value and net weight of silver must be recorded.
- Auction process for default must be in the agreement.
- Compensation for any loss.
Key changes amid rising silver prices
With silver prices soaring in 2025, RBI's new rules clarify its use for loans. Experts say this boosts transparency and benefits borrowers. The new system starts on April 1, 2026.