The Reserve Bank of India (RBI) has announced a major change in the lending framework — starting April 1, 2026, banks, NBFCs, and cooperative institutions will be allowed to provide loans against silver jewellery and coins, just like they currently do for gold.
Until now, gold was the only precious metal accepted as collateral by banks for secured loans. With this reform, silver assets stored at home can now also be used to unlock credit.
What Will Be Eligible as Collateral
Under the new rule:
- Silver jewellery and silver coins can be pledged to avail loans.
- The silver items must be verified for purity and ownership before approval.
This change is aimed at expanding financial inclusion, especially in rural and semi-urban areas where households traditionally hold more silver than gold.
Loan Value and Evaluation
Just like gold loans, banks will follow a Loan-to-Value ratio to decide how much loan can be given against pledged silver.
Jewellery appraisal will exclude stones, gems, or any non-silver attachments.
Who Will Benefit from This Rule
- Rural and semi-urban households: Silver is more commonly owned than gold in many regions; this gives people easier access to formal credit.
- Small traders and artisans: Can use their silver holdings to fund small businesses or manage cash flow.
- Banks and NBFCs: Will be able to reach new customer segments and diversify their lending portfolios.
Why This Move Matters
This RBI policy marks the first time silver has been officially recognized as loan collateral in India.
It brings multiple benefits:
- Strengthens rural credit access
- Promotes formal lending
- Reduces dependence on informal moneylenders
- Enhances liquidity in the precious metals market
By bringing silver under the loan-eligible asset category, RBI has effectively unlocked a new financial avenue for millions of Indian households.
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