Can You Pledge Silver for a Loan? Silver Has New Remarkable Change in RBI Guidelines

Silver can now be pledged for loans, but it’s not as simple as walking in with a coin. There are rules, weight limits, and valuation terms most people haven’t read yet.

Think of those old silver coins lying in the cupboard. Or a payal set no one wears anymore. These can now be used to take a loan, yes. The Reserve Bank of India (RBI) has quietly reshaped how Indians can borrow using silver.

The Reserve Bank of India (RBI) issued the Lending Against Gold and Silver Collateral Directions, 2025 on June 6, 2025, allowing, for the first time, silver jewellery and coins to be pledged as collateral for loans. These directions will come into effect from April 1, 2026.

This small rulebook carries a powerful message, silver has a new remarkable change in the way it represents financial worth now.

What’s Actually Changed In The Lending Process?

Earlier, people could only pledge gold. Now silver is allowed too, but only jewellery and coins. No bars. No silver biscuits. The RBI put weight caps too. You can pledge up to 10 kg of silver jewellery. Coins? 500 g is the limit. No more.

A LoansJagat article in May 2025 said gold and silver loans hit ₹2.51 lakh crore. Just a year before, it was ₹1.16 lakh crore. That’s a jump of 115.2%. You have to be present when the silver is tested. And the lender has to give a proper certificate, in a language you can read.
 

Feels like they’re being extra careful this time. Maybe that’s a good thing.

Silver Has a New Remarkable Change in Its Loan Value

The loan amount depends on silver’s market value. But the bank can’t just pick any rate. They must take the lower of these: the 30-day average or yesterday’s closing price. This comes from IBJA or a SEBI-approved exchange.

The actual money you get also depends on how much you’re borrowing.
 

So if your silver is worth ₹1 lakh, and the loan is small, you may get ₹85,000.

Back in 2020, during COVID times, RBI had relaxed the rules for gold loans. Lenders could offer more money per gram. This silver update feels similar, just stricter. Probably to stop misuse.

What Happens If the Borrower Fails to Repay?

If the loan isn’t paid, the bank gives a notice. Then comes the auction. The silver goes up for sale, with a base price of 90% of value. If it doesn’t sell twice, they can lower it to 85%.

If you repay, but they delay returning your silver, they have to pay ₹5,000 a day. No excuses. If no one collects the pledged silver for two years, the bank has to report it.

Conclusion 

Silver now comes with lending power. But it also brings clear do’s and don’ts. Those searching how to get a loan using silver jewellery in India, or rules for pledging silver items for bank loans, have to stick to the limits. The valuation process for silver collateral in Indian loans isn’t random either.

With these updates, India’s lending system feels more inclusive and silver’s new remarkable change is at the centre of it all. Not everything shiny is cash, but with the right paperwork, it certainly can be.

 

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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.