The Reserve Bank of India (RBI) has announced that individuals will soon be able to avail of loans against silver jewellery and coins, similarly like the gold loans, starting from April 1, 2026. The central bank said that the move aims to widen access to formal credit and provide an additional secured lending option for households across the country.
RBI’s new silver loan policy
According to the new guidelines issued by the RBI, banks and financial institutions, including commercial banks, cooperative banks, and even small finance banks will be permitted to offer loans backed by silver. The facility will allow borrowers to use their silver ornaments and coins as collateral for obtaining funds.
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The RBI stated that the decision was taken to ensure greater financial inclusion, especially for individuals in rural and semi-urban areas who hold silver assets but may not possess gold or other eligible collateral.
How much silver can be pledged?
Borrowers will be allowed to pledge up to 10 kilograms of silver to secure a loan. Additionally, silver coins up to 500 grams will be accepted as collateral. However, silver bricks, silver bars, and investment products like Exchange-Traded Funds (ETFs) or any silver-based mutual funds will not be eligible under this scheme.
According to the RBI circular, against silver valued at ₹2.5 lakh, a borrower can get a loan of up to 85% of its value, while for silver valued at ₹5 lakh, the loan-to-value (LTV) ratio will be capped at 75%.
Once the borrower repays the entire amount, banks or NBFCs will have to return the pledged silver within seven working days. Delayed return of pledged silver beyond the said period will invite a penalty of ₹5,000 per day, the RBI said.
If the borrowers are unable to give the repayment, the lending institution shall have the right to sell the pledged silver to recover outstanding dues, following all the due legal process.
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A step towards inclusive credit access
In order to increase the secured credit options for people who rely on unofficial borrowing, the RBI has implemented silver-backed lending. This new measure should increase liquidity and reduce the financial stress among lower and middle-income groups, as silver assets are widely held in rural India.
The guidelines are expected to significantly improve India's secured lending framework and will be applicable to all authorised financial institutions as of April 1, 2026.
