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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025

06-Jun-2025 | RBI/2025-26/47 DOR.CRE.REC.26/21.01.023/2025-26

RBI has issued the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025 applicable to to all commercial banks (excluding Payments Banks), primary (urban) and rural cooperative banks, and all Non-Banking Financial Companies (NBFCs), including Housing Finance Companies (HFCs). Key highlights are: 1. These directions consolidate and replace 31 circulars issued from 1964 to 2023. 2. Silver has been formally recognised as acceptable collateral within the Indian banking system. 3. Borrowers will now be able to pledge up to 10 kilograms of silver ornaments and 500 grams of silver coins for loans. For gold, the permitted collateral limit per borrower is 1 kilogram in the form of ornaments and 50 grams in coins. Importantly, lending against primary bullion such as bars or raw gold and silver remains prohibited, reinforcing the RBI’s stance against speculative practices. 4. The new framework introduces standardised Loan-to-Value (LTV) ratios to mitigate risk and ensure fair valuation practices. Loans up to Rs 2.5 lakh can now be disbursed at an LTV of 85 percent, while loans between Rs 2.5 lakh and Rs 5 lakh are capped at 80 percent, and loans above Rs 5 lakh at 75 percent. 5. Borrowers must now be physically present during the assaying process, and pledged assets must be stored securely in vault-equipped branches. These must be returned within seven working days post-repayment, with any delay attracting a penalty of Rs 5,000 per day. Furthermore, the lender will bear full responsibility for any loss or damage to the assets. Note: Instructions issued vide these Directions shall be complied with as expeditiously as possible but no later than April 1, 2026. For detailed information, please refer to the attached document.

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