The RBI Has Also Fixed the Maximum Limit of Loan-to-Value (LTV): Silver Loans Begin April 2026

From April 1, 2026, Indians will finally be able to pledge silver jewellery and coins for formal bank loans, a move long awaited by millions.

Most families have silver tucked away, in small boxes or trunks, saved for special days. Under the Lending Against Gold and Silver Collateral Directions, 2025, the Reserve Bank of India (RBI) is officially expanding the secured lending system to include silver.

This step not only empowers small borrowers but also aligns silver lending with gold loan norms. And yes, the RBI has also fixed the maximum limit of loan-to-value (LTV) at up to 85% on loans up to ₹ 2.5 lakh, up to 80% on loans from ₹ 2.5 lakh to ₹ 5 lakh and up to 75% on loans above ₹ 5 lakh.

What the RBI’s New Silver Lending Rules Say

The new RBI silver jewellery policy allows banks and NBFCs to give loans against silver jewellery and silver coins. Silver bars, bullion, or silver‑based financial products will not count as collateral. The rule is meant to keep lending clean and traceable.

Here’s how much a borrower can pledge.
 

Lenders must check purity through certified valuers. Value will be decided using the lower of the 30‑day average or the previous day’s IBJA rate. This step will bring better order to silver jewellery loan regulations. It should also protect borrowers from unfair pricing.

The RBI Has Also Fixed the Maximum Limit of Loan-to-Value (LTV) for Silver Loans

The loan‑to‑value (LTV) ratio decides how much money one can get against silver. The RBI has also fixed the maximum limit of loan‑to‑value (LTV) at up to 85% on loans up to ₹ 2.5 lakh, up to 80% on loans from ₹ 2.5 lakh to ₹ 5 lakh and up to 75% on loans above ₹ 5 lakh.
 

According to the RBI lending norms 2025, this tiered structure balances accessibility with responsibility.

It’s clear that the RBI has also fixed the maximum limit of loan-to-value (LTV) at up to 85% on loans up to ₹ 2.5 lakh, up to 80% on loans from ₹ 2.5 lakh to ₹ 5 lakh and up to 75% on loans above ₹ 5 lakh to maintain both borrower safety and financial discipline.

Linking to Earlier Gold Loan Reforms

In June 2023, the RBI had tightened gold loan rules, valuation, repayment time, even how auctions must be handled. The same pattern now extends to silver. Lenders must return pledged items within seven working days after repayment. If they fail, a fine of ₹ 5,000 per day applies.

Earlier, we covered the gold loan update here: Read it on Moneycontrol. The silver update just continues that story. If a borrower defaults, the silver can be auctioned only after a one‑month notice, starting at 90 per cent of current value, dropping to 85 per cent after two failed rounds. Feels fair enough.

How Banks and Lenders Are Responding

Public banks like SBI and Canara Bank are updating their systems for this. Private lenders and NBFCs such as Muthoot and Manappuram may soon follow. A LoansJagat article in October 2024 said that gold and silver loans together could reach ₹ 1.45 lakh crore by 2028. Big number, but possible.

Officials believe the step will reduce local pawn lending. Many in small towns still borrow on daily interest from informal agents. This new rule may shift them into formal credit. Sometimes, it’s these small reforms that change habits.

Conclusion

The RBI silver jewellery policy under the RBI lending norms 2025 treats silver almost like gold. Clear limits, fixed loan‑to‑value ratios, and strict timelines make borrowing safer.

With the rule starting 1 April 2026, people can soon use silver as a real financial asset, not just as ornaments locked away. Feels like a quiet but practical step in India’s lending story.

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