12 Nov 2026
The Reserve Bank of India issued the Lending Against Gold and Silver Collateral Directions, 2025 on 6 June 2025, and updated them on 29 September 2025. For a gold-loan borrower, the main rules are a loan-to-value (LTV) ceiling that depends on the loan size, a standard way of valuing your gold, a set time for returning it, and fixed steps before an auction. The full text is on the RBI website.
Who the Directions cover
They apply to commercial banks (including small finance banks, local area banks and regional rural banks, but not payments banks), co-operative banks and all NBFCs including housing finance companies. They cover consumption and income-generating loans, including farm credit, that are secured by eligible gold or silver. Lenders had to comply as expeditiously as possible, and no later than 1 April 2026. Loans sanctioned before a lender adopted the Directions stay under the earlier rules. RBI's later consolidated NBFC Credit Facilities Directions, dated 28 November 2025, carry a chapter with the same limits for NBFCs.
How much you can borrow against gold
Maximum LTV for consumption loans
| Total loan amount | Maximum LTV |
|---|---|
| Up to ₹2.5 lakh | 85% |
| Above ₹2.5 lakh and up to ₹5 lakh | 80% |
| Above ₹5 lakh | 75% |
LTV is the loan as a share of the value of the gold. The lender must keep within the ceiling throughout the loan. See our glossary entry on LTV and the guide on gold loan LTV. For a bullet-repayment consumption loan, where principal and interest are paid at maturity, the tenor is capped at 12 months and the LTV uses the total amount payable at maturity. The lender can renew it only after the accrued interest is paid. A detailed credit assessment, including repayment capacity, is needed when your total borrowing against gold or silver exceeds ₹2.5 lakh.
How your gold is valued
- The value uses a price for the purity of your gold: the lower of the 30-day average closing price or the previous day's closing price, published by IBJA or a SEBI-regulated commodity exchange.
- Only the metal counts. Stones and gems add nothing to the value.
- You must be present when the gold is assayed at sanction, and deductions for stones or fastenings must be explained to you.
- The lender must give you a certificate stating the purity in carats, gross and net weight, deductions, any defects, an image of the gold and the value at sanction.
- Lenders must publish their valuation and net-weight method on their websites.
What the lender cannot do
A lender cannot lend for the purchase of gold in any form, including ETFs and mutual fund units backed by gold. It cannot lend against primary gold or silver, which means bullion. It cannot re-pledge your gold. Eligible collateral is jewellery, ornaments or coins. The limits per borrower across all loans are 1 kg of gold ornaments, 10 kg of silver ornaments, 50 g of gold coins and 500 g of silver coins. You must give a declaration that the gold belongs to you.
Getting your gold back
The collateral must be returned on the same day as full repayment or settlement, and no later than seven working days after. You may check it against the certificate before you take it. If the delay is the lender's fault, the Directions provide compensation of ₹5,000 for each day of delay beyond the timeline. This is without prejudice to any other compensation you can claim under law.
If the lender plans an auction
Auction safeguards
| Step | What the Directions require |
|---|---|
| Notice | Adequate notice to repay or settle before auction, with records of notice and acknowledgement |
| If you cannot be found | Public notice, and auction only after one month from its date |
| Advertising | In at least two newspapers, one regional language and one national daily |
| Reserve price | At least 90% of current value, falling to 85% if two auctions fail |
| Who bids | The lender and its related parties cannot bid |
| Surplus | Refunded within seven working days of receiving the full auction proceeds |
What this means for you
- Ask for the valuation certificate and keep it. Check purity, weight and deductions against what you were told.
- Ask for the Key Fact Statement and compare offers on the APR. Charges are set by the lender. See Key Fact Statement and APR.
- Choose the repayment style that suits you. A bullet loan has a 12-month tenor limit. See gold loan repayment options.
- Know your return rights. Note the date you repay and ask for your gold back that day.
- Do not ignore notices. Reply early if you cannot repay, because notices come before any auction.
- If something goes wrong, use the lender's grievance process first, then the RBI complaint portal. See our grievance page.
More on this loan is on our gold loan page and the gold loan guide.
Related reading: Key Fact Statement and APR, gold loan repayment options, grievance page.
Sources
- Reserve Bank of India, Lending Against Gold and Silver Collateral Directions, 2025, issued 6 June 2025 (RBI/2025-26/47), updated 29 September 2025, rbi.org.in (link in the text above).
- Reserve Bank of India, Lending Against Gold and Silver Collateral (1st Amendment) Directions, 2025, 29 September 2025: https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=12903
- This note summarises public rules in general terms. Check the current text before you rely on a limit.