The RBI's Lending Against Gold and Silver Collateral Directions, 2025 value collateral at IBJA or SEBI-regulated exchange prices (IBJA 24K benchmark Rs 1,40,054 per 10 g, as of PM rate of 30 Oct 2026) and cap consumption-loan LTV at 85 percent up to Rs 2.5 lakh, 80 percent above that to Rs 5 lakh, and 75 percent above Rs 5 lakh. Lenders had to comply by 1 April 2026.
The directions are dated 6 June 2025 and carry the reference RBI/2025-26/47. The consolidated text on the RBI website is marked as updated on 29 September 2025, and the rules below come from that text. They bind banks, cooperative banks and NBFCs that lend against gold or silver collateral. Borrowers are not bound by them, but they can use the same rules to check a lender's terms.
What the directions say
The rules apply from the compliance deadline of 1 April 2026. Loans sanctioned before a lender adopted the directions stay under the earlier guidelines (paragraph 4). The directions also repeal the older circulars listed in Annex 2 from their effective date (paragraph 56). This article does not restate those older rules, so the table shows only what the new text says.
| Item | What the directions say | Paragraph |
|---|---|---|
| Who is covered | Commercial banks (not payments banks), primary urban and rural cooperative banks, and NBFCs including housing finance companies | 5 |
| Eligible collateral | Gold or silver jewellery, ornaments and coins. Primary gold and primary silver, such as bullion, are not eligible | 6, 12 |
| LTV cap, consumption loans | 85 percent up to Rs 2.5 lakh; 80 percent above Rs 2.5 lakh to Rs 5 lakh; 75 percent above Rs 5 lakh, by total loan per borrower | 19 |
| Valuation price | Lower of the 30-day average closing price and the previous day's closing price, for the same purity, published by IBJA or a SEBI-regulated commodity exchange | 17 |
| Weight limit per borrower | Ornaments: 1 kg gold, 10 kg silver. Coins: 50 g gold, 500 g silver. The limit counts all loans to one borrower | 16 |
| Bullet repayment tenor | Capped at 12 months for consumption loans; renewal allowed only after accrued interest is paid | 11, 15 |
| Auction reserve price | Not less than 90 percent of current value; 85 percent if auctions fail twice | 40 |
Source: RBI Lending Against Gold and Silver Collateral Directions, 2025, paragraphs as shown. Checked on 26 October 2026.
Try it: Gold Loan EMI Calculator lets you enter a loan amount, interest rate and tenure, and shows the EMI and total interest.
Who this affects
Borrowers who pledge gold or silver ornaments or coins with a covered lender. The weight limits in paragraph 16 apply to all loans a borrower has, not to each loan separately. Where the total loan against gold or silver collateral to a borrower is above Rs 2.5 lakh, the lender must carry out a detailed credit assessment, including the borrower's repayment capacity (paragraph 10).
Lenders must publish on their website the methodology and the price they use for the LTV (paragraph 22), assay each pledge in the borrower's presence (paragraph 23), and disclose these loans in their notes to accounts (paragraph 55).
How the LTV cap works, with a labelled example
The cap depends on the total consumption loan amount, and the eligible collateral is valued before the cap is applied. The example below uses round, assumed numbers. It is not a quote from any lender.
Worked example with assumed numbers, not a quote from any lender. Source: RBI Lending Against Gold and Silver Collateral Directions, 2025, paragraph 19.
| Step | Working | Value |
|---|---|---|
| Example collateral value (assumed, after valuation under paragraph 17) | assumed input | Rs 2,50,000 |
| Loan requested (assumed) | assumed input; up to Rs 2.5 lakh, so the 85 percent band applies | Rs 2,00,000 |
| LTV cap for this band | paragraph 19 | 85 percent |
| Maximum loan at the cap | 2,50,000 x 0.85 | Rs 2,12,500 |
| Requested loan within the cap | 2,00,000 is less than 2,12,500 | Yes |
Example figures, not today's rates.
The band moves with the loan amount. Against collateral valued at Rs 5,20,000, a loan of Rs 4,00,000 falls in the 80 percent band, so the ceiling is Rs 4,16,000.
How the collateral is valued
Paragraph 17 values the gold or silver by its actual purity. The lender uses the lower of two prices from IBJA or a SEBI-regulated commodity exchange: the average closing price over the previous 30 days, or the previous day's closing price. Only the metal content counts, and stones or gems are not added (paragraph 18). The chart below shows the IBJA 24K series over 30 days as one example of the data behind the averaging rule. Lenders use the price for the purity they accept. Live IBJA figures are on the gold rate today and silver rate today pages.
Latest Rs 1,40,054 (30 Oct 2026)High Rs 1,49,430 (9 Oct 2026)Low Rs 1,40,054 (30 Oct 2026)
What to do if you are pledging gold or silver
- Ask the lender for the valuation method and the price it uses, which it must publish on its website (paragraph 22).
- Check the LTV band against the total consumption loan amount in the paragraph 19 table, and ask the lender which cap it applied.
- Ask for the assay certificate, which must show purity in carats, gross weight, net gold or silver weight, any deductions and an image of the item (paragraph 27).
- Read the loan agreement and Key Fact Statement for the notice period before auction, the release timeline and every charge (paragraph 26).
- Track the release date. The collateral must come back within seven working days of full repayment, and if the delay is the lender's fault it owes Rs 5,000 for each day beyond that timeline (paragraphs 35 and 46).
What has not changed
The text we read sets no interest rate, so each lender still prices its own loans. Lending against primary gold, such as bullion, and against financial assets backed by gold or silver, such as ETF units, is not allowed under paragraph 12.
