Can You Get a Loan Against Silver Now? RBI’s New Rules Explained

Silver jewellery and coins will soon be accepted as loan collateral by banks and NBFCs

Not long ago, silver was seen only as a household item. Worn during festivals, passed down in families. Never something you'd think of taking to the bank. But now, that’s changing.

On 6 June 2025, the Reserve Bank of India rolled out a fresh set of rules called the Lending Against Gold and Silver Collateral Directions, 2025. These rules come into effect from 1 April 2026. For the first time, silver jewellery and coins will be accepted as collateral for loans.

Banks, cooperative societies, small finance banks, and NBFCs, all regulated lenders, will follow the same method. But silver bars and ETFs? Still not allowed.

There’s a reason for all this. Between September 2024 and February 2025, gold loans rose by 30%, as per RBI’s data. That much activity made them stop and look. Silver, they felt, needed a formal place in the system.

What Kind of Silver Will Be Accepted for Loans?

This isn’t about just walking in with silver and walking out with money. The kind of silver matters. There are limits, checks, and careful valuation now.

Coins are allowed, but only up to 500 grams. Ornaments too, but only if properly valued and documented. Bullion and silver bars? Still off the table.
 

Most banks will likely issue short-term loans against these, just like gold. But the paperwork will be a bit more detailed now.

Gold-backed loans rose about 30% between September 2024 and February 2025, as LoansJagat reported. And the scale got bigger. Outstanding gold loans touched ₹2,51,369 crore in May 2025, up 115.2% year-on-year from ₹1,16,777 crore in May 2024, based on data placed in Lok Sabha.

How Will Silver Loans Work for Borrowers?

A silver loan means you give silver to a lender, and they give you money. Later, you return the money with interest, and take back your silver.

But there’s more structure now. Under updated RBI regulations on silver-backed loans, lenders have to follow fixed LTV ratios. LTV means how much money you get based on the value of the silver.

They must also reassess the value if the loan runs long. That’s to avoid cheating or over-pledging.
 

This structure falls under RBI guidelines for silver loan 2025, and will apply across all lenders.

Why Is RBI Introducing Silver Loans Now?

In August 2020, during COVID, RBI relaxed LTV caps for gold loans, raising it to 90%. That helped many households get quick money. But by 2023, frauds and risks in gold loans grew. Banks raised concerns.

So now, the RBI is cautious. In July 2025, another note came out. It explained that even MSME and agriculture loans with voluntary silver pledges will come under these same rules.

This shows how RBI policy changes for loans against silver are built from past learnings. Nothing random here.

Conclusion 

Earlier, silver had no place in official lending. It was used in informal setups, sometimes pawn shops, sometimes unlicensed lenders. Banks didn’t want to deal with it.

Now, under the new Reserve Bank rules on silver loans, everything changes. Banks must maintain purity records, storage details, price proofs, and proper audit trails. Every silver loan will also be reported in annual reports.

That’s a big shift. Feels like silver is finally being treated with the same respect as gold, at least in paperwork.

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LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.