The Reserve Bank of India (RBI) has issued new guidelines for gold and silver loans.
These new directions affected both lenders (banks/NBFCs) and borrowers (individuals or businesses).
Effective From
- October 1, 2025: Rules apply to banks and NBFCs (lending institutions).
- April 1, 2026: Rules apply to borrowers (those taking the loan).
Restrictions on Gold Loans
Borrowers can no longer take loans from Bank or NBFCs to purchase gold or silver in any form, such as:
- Gold jewelry
- Gold coins
- Gold ETFs or Gold mutual funds
Loans are also not allowed against unprocessed raw gold or silver (i.e., unrefined or unconverted forms of these metals).
Eligibility for Gold Loans
- General individuals pledging gold for personal loans.
- All Jewelry manufacturers using gold or silver as raw materials.
- Outsourced jewelry makers or small artisans working for bigger jewelers.
Newly Lenders Added
- Apart from regular banks and NBFCs, Small Urban Cooperative Banks (Tier 3 & 4 cities) can now also provide gold/silver loans.
Extended Loan Repayment Period
Repayment of loan period has been increased to 270 days i.e., 9 months.
Now, small jewellery makers who work for big jewllers will also get extra time upto 270 days to finish their work and return the gold.
New Loan-to-Value Rules From April 2026
Loan amount depends on the gold value:
| Gold Loan Amount | Maximum Loan-to-Value Allowed |
| Up to ₹2 lakh | 85% |
| ₹2.5-5 lakh | 80% |
| Above ₹5 lakh | 75% |
New Repayment Rules
Borrowers must repay both principal and interest within 12 months.
Earlier, people could just pay interest and renew the loan - this will no longer be allowed.
Gold Return Rules After Full Repayment
After the borrower fully repays the loan, the lender (bank/NBFC) must return the gold within 7 working days.
Penalty: if delayed ₹5,000 per day penalty will be applicable.
Transparent Agreements
Loan agreements must clearly mention:
- Gold's valuation details
- Repayment schedule
- Auction rule
- Time limit for returning gold after closing loan.
Fair Valuation System
Gold's loan value will be calculated using the lower of:
- Average price over the last 30 days, or
- Previous day's rate (as per SEBI or IBJA).
Making charges and stone value will not be included - only the pure gold value counts.
Transparent Auctions
In case of default:
Advance notice will be given before auction.
Reserve price = 90% of market value (can drop to 85% if two auctions fail).
Any extra amount from auction must be returned to the borrower within 7 days.
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