Silver Loan: RBI Rules for Borrowing Against Silver

You can borrow against silver jewellery, ornaments and coins from banks and NBFCs under the RBI’s Lending Against Gold and Silver Collateral Directions, 2025. Lenders had to adopt these rules by 1 April 2026. Consumption loans are capped at 85% of your silver’s value for loans up to ₹2.5 lakh, 80% up to ₹5 lakh and 75% above that.

Key facts

What changed on 1 April 2026

The RBI issued the directions on 6 June 2025 and amended them on 29 September 2025. Lenders had to comply as soon as possible, and no later than 1 April 2026. The rules cover commercial banks (including small finance banks, local area banks and regional rural banks, but not payments banks), urban and rural co-operative banks, and all NBFCs, including housing finance companies.

Some lending against silver was already allowed under older circulars. The 2025 directions replaced these with one framework for gold and silver across all these lenders. In November 2025 the RBI moved the same rules into its consolidated directions for banks and NBFCs. The NBFC version, updated to 15 July 2026, keeps the same LTV limits.

A loan sanctioned before your lender adopted the new directions stays under the older rules.

Which silver is accepted, and how much

The directions define eligible collateral as jewellery, ornaments or coins made of gold or silver. Jewellery means items worn as personal adornment. Ornaments cover decorative items and utensils.

Lenders cannot lend against primary silver such as bars, or against financial assets backed by it. Across all your loans with one lender, pledged silver ornaments cannot exceed 10 kg and silver coins cannot exceed 500 grams. You must also declare that you own the silver. Lenders will not lend where ownership is doubtful.

How your silver is valued and how much you can borrow

The lender values the silver on its actual purity. It takes the lower of two prices published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange:

• the average closing price over the previous 30 days, or
• the previous day’s closing price.

Only the silver content counts. Stones, gems and other cost elements are left out. Our silver rate page tracks current silver prices.

For a bullet repayment loan, LTV is worked out on the total amount due at maturity, interest included. The LTV cap applies throughout the loan, so a fall in silver prices can push you over the limit. Each lender’s policy sets what happens then, so ask before you sign. If total borrowing against the metal goes above ₹2.5 lakh, the lender must also assess your repayment capacity.

Which lenders offer silver loans

Availability depends on the lender. Union Bank of India lists a loan against silver ornaments on its website. IIFL Finance describes its silver loan on its blog. Interest rates, purity thresholds and minimum amounts are set by each lender, so compare the Key Facts Statement before you choose. If you already have a gold loan, our gold loan guide covers the gold side of the same rules.

How to take a silver loan

1. Confirm that your bank or NBFC offers loans against silver and ask for its interest rate and charges.
2. Take your KYC documents and the silver items to a branch. The silver is handled and stored only at branches, by the lender’s employees.
3. Stay present while the silver is assayed. Staff must explain deductions for stones, fastenings and similar items.
4. Collect your copy of the assay certificate. It must show purity, gross and net weight, deductions, any damage, a photo of the items and their value.
5. Read the loan agreement and Key Facts Statement. Both must list all charges, including assaying and auction costs, and the notice period before any auction.
6. Receive the money in your bank account.
7. Repay on schedule. To renew or top up, the loan must be standard and within the LTV cap, and a bullet loan’s accrued interest must be paid first.

Use the EMI calculator if you choose monthly instalments rather than a bullet payment. Terms must be given in your regional language or a language you choose.

Getting your silver back: the 7-day rule

Once you repay in full, the lender must return your silver the same day, and within seven working days at most. Check the items against the assay certificate when you collect them. If the lender causes a delay, it pays you ₹5,000 for each day beyond seven working days. If silver is damaged while pledged, the lender pays for repair. Loss, or any shortfall in weight or purity, must be compensated.

Silver left with a lender for more than two years after the loan is closed is treated as unclaimed. The lender must try to trace you or your legal heirs.

Auction rules if you default

• The lender must give you notice to repay before starting an auction. If you cannot be traced, it can go ahead one month after a public notice.
• The auction must be advertised in at least two newspapers, one in the regional language and one national daily.
• The reserve price must be at least 90% of the silver’s current value, or 85% after two failed auctions.
• The first auction must be held physically in the district of your branch. Later auctions may be held in a nearby district or online.
• The lender and its related parties cannot bid.
• You must get full details of the sale price and dues adjusted. Any surplus must be refunded within seven working days of the lender receiving the proceeds.

If a lender breaks these rules, complain to it first, then to the RBI Ombudsman.

Frequently asked questions

Can I get a loan against silver in India?

Yes. Banks, co-operative banks and NBFCs can lend against silver jewellery, ornaments and coins under the RBI’s 2025 directions, which lenders had to adopt by 1 April 2026.

How much loan can I get on silver?

Up to 85% of the assessed value for consumption loans up to ₹2.5 lakh, 80% up to ₹5 lakh and 75% above that.

What is the silver loan interest rate?

The RBI does not fix it. Each lender sets its own rate, which you will find in the Key Facts Statement.

Can I pledge silver bars or silver ETFs?

No. Primary silver such as bars, and financial assets backed by silver, are not accepted.

Is there a limit on how much silver I can pledge?

Yes: 10 kg of silver ornaments and 500 grams of silver coins in total per borrower.

What if the lender does not return my silver after I repay?

It must return the silver within seven working days, or pay ₹5,000 for each day of delay it causes.

Sources

• Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025, updated 29 Sep 2025 — Reserve Bank of India (checked 16 Sep 2026)
• Non-Banking Financial Companies – Credit Facilities Directions, 2025 (updated 15 July 2026) — Reserve Bank of India (checked 16 Sep 2026)
• Commercial Banks – Responsible Business Conduct Directions, 2025 (gold and silver collateral) — Reserve Bank of India (checked 16 Sep 2026)
• FAQs on Reserve Bank – Integrated Ombudsman Scheme, 2026 — Reserve Bank of India (checked 16 Sep 2026)
• Loan against silver ornaments — Union Bank of India (checked 16 Sep 2026)
• Silver loan eligibility in India — IIFL Finance (checked 16 Sep 2026)