If you took a gold loan a couple of years ago and are applying again now, you may notice that the process looks different. RBI’s revised gold loan framework effective April 2026 has introduced a more standardised approach to valuation, documentation, auction procedures, and borrower protection across regulated lenders in India.
Whether you are borrowing for personal use or business needs, these rules affect how much you can borrow, how your gold is valued, and how quickly it should be returned after repayment.
Here's what changed, and what it means for you.
Key Highlights
- RBI’s revised framework standardises how gold is valued, documented, and auctioned across regulated lenders in India, including banks and NBFCs.
- Gold loan LTV now follows a tiered approach: up to ₹2.5 lakh, maximum LTV of 85%; above ₹2.5 lakh and up to ₹5 lakh, maximum LTV of 80%; and above ₹5 lakh, maximum LTV of 75%.
- Every lender must issue a purity and valuation certificate at sanction, recording karat purity, gross weight, net weight after deductions, and the assessed value.
- Auctions must follow prescribed notice and disclosure requirements, use a transparent reserve price mechanism, and any surplus must be refunded to the borrower as per the applicable process.
- If a lender delays returning your gold after repayment, borrower compensation may apply under the revised framework, subject to the exact regulatory conditions.
What Are the RBI's New Gold Loan Rules?
The RBI has tightened how lenders value your gold, standardised the auction process if a loan goes bad, and put clearer timelines around getting your gold back.
These are the rules NBFCs (Non-Banking Financial Companies) and banks are now operating under.
If you're borrowing against gold in 2026, this is the framework that applies to you.
RBI Guidelines for Gold Loan — 9 Rules Borrowers Should Know
1. Loan-to-Value (LTV) Caps
The RBI gold loan LTV rules mean revisions on how much you can borrow against your gold's value. The RBI replaced the old uniform 75% LTV with a tiered structure.
- For loans up to ₹2.5 lakh, lenders can offer up to 85% of the gold's assessed value.
- From ₹2.5 lakh to ₹5 lakh, the cap is 80%.
- Above ₹5 lakh, it drops to 75%. This benefits small-ticket borrowers the most.
Tiered LTV makes it easier for households to access higher credit against the same jewellery, but only within the regulated bands.
Under the current framework, Shriram Gold Loan offers up to {{GL_LTV}} LTV, supported by documentation.
Note: This framework reflects the RBI's revised Loan-to-Value structure effective April 2026. Applicable LTV is subject to Shriram Finance's assessment and prevailing RBI guidelines.
2. Eligible Collateral
The rule book is clear that collateral must be tangible, verifiable gold of acceptable purity.
Only gold jewellery and ornaments between 18Kt and 22Kt purity count towards your loan amount.
- Gemstones and diamonds studded in the jewellery are excluded from the valuation.
- Bars, bullion, biscuits, and digital gold products are generally not eligible.
3. Mandatory Purity Certification
Every pledge now goes through a documented purity check before valuation, and not an eyeballed estimate. Every lender must issue a purity and valuation certificate at sanction. It should show karat purity, gross and net weight, deductions for stones, and the final valuation used to calculate the loan. This document is your proof of how the loan amount was worked out.
4. Proof of Ownership
Lenders must record a declaration of ownership at the time of pledge. Lenders must be satisfied that the pledged gold belongs to the borrower or is pledged with proper consent. If ownership is unclear, they may ask for a self-declaration plus standard KYC documents. This avoids informal or disputed pledges.
5. Standardised Valuation
Gold is now valued using a 22-karat benchmark, with the rate taken as the lower of the 30-day average or the previous day's closing price from IBJA or SEBI-approved exchanges. Only the intrinsic gold value counts — stones, gems, polish, and making charges are excluded.
This reduces branch-level discretion and makes offers more comparable across lenders.
6. Weight and Coin Pledge Limits
Defined caps now apply to the weight of gold coins a lender can accept, separate from jewellery, so the product isn't misused as a way to pledge bullion. To contain risk, the RBI sets overall pledge limits per borrower across a lender's network.
Typical caps are around 1 kg of gold jewellery and 50 g of bank-issued gold coins (with separate limits for silver where applicable). Lenders may apply tighter internal limits for new customers or high-value exposures.
What you need to remember:
Large pledges may need to be split across loans or reduced to meet limits.
7. Fair Auction Rules
If a loan slips into default, the RBI circular on gold loan auctions requires lenders to give advance notice, follow a transparent reserve-price method, and allow the borrower to redeem before the auction date. The process must be transparent and properly notified.
- Public notice in two newspapers is mandatory.
- The reserve price must be at least 90% of current gold value.
- The first auction must take place physically in the same town or taluka as the loan branch.
- Any surplus from the auction must be refunded within seven working days.
8. Timely Release and Compensation
Once the loan is fully repaid, the lender must return the pledged gold on the same day or within 7 working days. If the return is delayed beyond the stipulated timeline, the lender becomes liable to pay compensation per day of delay as per the framework.
9. Bullet Loan Tenure and Renewal
For bullet repayment loans (single lump-sum payment at maturity), the maximum tenure is capped at 12 months. Renewals or top-ups are allowed only if the account is regular and remains within LTV limits, with interest dues cleared. This is meant to stop indefinite rollovers.
Bullet loans are designed for shorter borrowing cycles, not open-ended rollovers. If your repayment need is likely to stretch beyond a year, an EMI-based structure may be more suitable because it spreads repayment across the tenure instead of forcing a maturity reset.
Borrowers should also note that renewal is not automatic. Lenders may review the account position, outstanding dues, and LTV compliance before extending the loan further.
RBI Gold Loan Interest Rate — What's Changed
The RBI hasn't fixed interest rates directly, that's still set by each lender. What the new guidelines do is force more transparency around how the rate is disclosed upfront. Interest rates for Shriram Gold Loan start at {{GL_interest}} per annum (p.a.) and are subject to change. Visit shriramfinance.in or your nearest branch for the rate applicable to you.
How to Find the Best Gold Loan Rate under the New RBI Rules
To compare offers effectively:
- Ask for the Key Fact Statement and read the interest rate, processing fee, and prepayment terms side by side.
- Check how the lender values gold (22-karat benchmark, 30-day average rule) and whether the certificate is clear.
- Confirm the LTV band you fall into and how it affects your eligible amount.
- Look at repayment flexibility: EMI vs bullet vs periodic interest, and how renewals are handled.
- Compare gold release timelines and the lender's track record on closures.
A slightly higher rate with faster release and clean documentation can be better than a marginally cheaper loan with opaque processes.
What to Check before You Borrow
Instead of chasing "the lowest rate," look at the whole picture: what LTV you're eligible for, whether foreclosure or part-payment charges apply, and how fast your gold gets released after repayment.
You may check your eligibility for Shriram Gold Loan under the current framework, it only takes a few minutes, with no credit check involved.
If you're comparing your options, run the numbers using an online gold loan EMI calculator before you commit to a tenure.
FAQs
What are the RBI guidelines for gold loan auction?
RBI rules require gold loan auctions to be transparent and publicly announced in advance. The auction should first be held in the same town or taluka as the branch. The reserve price for the auction is initially set at 90% of the current market value of gold. However, this is not a universal fixed rule for all auctions and can be adjusted based on auction outcomes. Borrowers must get proper notice before the sale, and any extra amount from the auction (after loan recovery) must be refunded within seven working days.
Who are not eligible for gold loan?
You cannot get a gold loan if you pledge ineligible items like gold bars, bullion, or digital/financial gold assets. Loans are also usually not approved if the ownership of the pledged gold is under question or if the gold has already been pledged elsewhere.
What is the trend in gold loans?
Across lenders, valuation, documentation, and audit standards are becoming more uniform. It’s all about making sure borrowers are treated fairly. The pledged gold’s value must be recorded properly, auctions should be open and just, and any extra money after repayment should go back to the borrowers without delay.
What is the new policy of gold loan in RBI?
The RBI’s 2025 gold loan framework effective since April 2026 brings common rules for both banks and NBFCs. It defines what kind of gold assets can be accepted, sets 22-karat as the benchmark for valuation and requires lenders to issue purity certificates. The new norms also cap bullet repayment loans for consumption use and lay down clear steps for auction and compensation in case of default.
How does gold loan become NPA?
If repayment is not made within the due period, the account may be treated as irregular and later classified as an NPA under the lender’s policy and applicable regulatory norms.
What are the limitations of gold loan?
Gold loans have limits set by the RBI and lenders. These include caps on LTV ratio, ineligibility of bullion or gold ETFs and maximum limits on weight — often up to 1 kg of jewellery and 50 grams of bank coins. Gemstones are not counted for valuation. Bullet loans for consumption purposes have a maximum tenure of 12 months and borrowers taking multiple loans are subject to stricter scrutiny.