Can gold loan be given on gold bars?

As of May 2025, you cannot get a gold loan by pledging gold bars, bullion, or any other raw or semi-finished forms of gold. The RBI has introduced new draft guidelines that specifically restrict lenders from accepting gold bars, ingots, or bullion as collateral for gold loans. This change has been made to standardise lending practices, reduce misuse, and protect both borrowers and lenders from risks associated with lending against non-jewellery gold items.

Under the latest norms, only gold jewellery and certain coins issued by banks are considered eligible for gold loans. If you wish to take a gold loan, you will need to pledge gold ornaments or bank-minted coins (up to a specified weight limit, typically 50 grams per borrower). The gold jewellery must also meet minimum purity requirements, usually 22 carats, and will be valued accordingly. Gold bars, even if of high purity, are not accepted by regulated lenders for this purpose.

This move by the RBI is aimed at bringing greater transparency and uniformity to the gold loan sector. It also helps ensure that gold loans are backed by assets that are easier to value and liquidate if needed. If you are considering a gold loan, always check with your lender about the types of gold they accept and be prepared to provide gold jewellery or eligible coins as collateral.