What is the new rule of RBI for gold loan?

The Reserve Bank of India’s latest guidelines for gold (and silver) loans, effective no later than April 1, 2026, standardize and strengthen lending practices across all banks, co-operative banks, and NBFCs.

Scope:

• Applies to loans against gold/silver jewellery, ornaments, and coins for consumption loans.
• Excludes primary gold/silver (bullion, bars) and gold/silver-backed financial products.

Loan-to-Value (LTV) Ratio:

• Up to ₹2.5 lakh: Max 75%
• Above ₹2.5 lakh to ₹5 lakh: Max 80%
• Above ₹5 lakh: Max 75%
• LTV must be maintained throughout the loan, not just at sanction.

Tenure & Limits:

• Maximum tenure for bullet repayment loans: 12 months (renewable after interest payment).
• Maximum: 1 kg gold ornaments or 50g gold coins per borrower (10 kg/500g for silver).

Valuation & Assaying:

• Gold/silver is valued at the lower of the 30-day average or previous day’s price (IBJA/SEBI exchange).
• Only the metal’s intrinsic value counts—no value for stones/gems.
• Standardized and transparent assaying/valuation procedures required.

Other Rules:

• Ownership of pledged gold/silver must be proven.
• Lenders cannot re-pledge or accept already-pledged gold/silver from others.
• Transparent auction and compensation process for defaults.
• Borrower must be present during assaying.

These rules aim to protect borrowers, ensure fair valuation, and harmonize gold loan practices across all lenders.