RBI to Permit Loans Against Silver Jewellery from April 2026

The Reserve Bank of India (RBI) has announced that starting April 1, 2026, individuals will be able to secure loans by pledging silver jewellery, ornaments, or coins as collateral. The move, part of revised lending guidelines for banks and financial institutions, aims to enhance credit access for low-income households and small businesses while standardising borrower protections and lender accountability. However, loans against primary silver like bullion will not be permitted to curb speculative activities in the precious metals market.

The new policy is expected to benefit rural and semi-urban borrowers, where silver holds both cultural and financial importance. Industry experts believe the change will provide an alternative to gold-backed loans, improving financial inclusion for those traditionally dependent on informal credit sources.

The RBI noted that silver-backed loans may carry lower loan-to-value ratios and slightly higher interest rates than gold loans due to silver’s higher volatility and lower liquidity. Borrowers have been urged to consider factors such as silver purity, insurance, repayment terms, and price fluctuations before opting for such loans.

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