RBI Issues Unified Guidelines for Lending Against Gold and Silver

Circular No. RBI/2025-26/47 DOR.CRE.REC.26/21.01.023/2025-26, Dated 06.06.2025

The Reserve Bank of India (RBI) has issued the RBI (Lending Against Gold and Silver Collateral) Directions, 2025, to streamline and harmonise the regulatory framework governing loans backed by precious metal collateral.

1. Objective of the Directions

The new Directions aim to establish a principle-based and uniform regulatory structure for all Regulated Entities (REs) engaged in extending credit against gold and silver. The initiative is part of RBI’s broader objective to enhance transparency, accountability, and risk management in lending practices.

2. Scope and Applicability

These Directions are applicable to all categories of Regulated Entities, including banks and non-banking financial companies (NBFCs), ensuring consistent treatment across the financial sector for loans backed by eligible precious metal collateral.

3. Key Areas Covered

The RBI Directions comprehensively address the following critical components:

• General Conditions – Laying down the basic eligibility and operational parameters applicable to all loans secured by gold or silver.
• Conduct-Related Guidelines – Setting standards for ethical practices, fair treatment of borrowers, and grievance redressal mechanisms.
• Collateral Management Practices – Requiring robust protocols for the valuation, custody, verification, and insurance of gold and silver collateral to safeguard borrower and institutional interests.
• Disclosure Requirements – Mandating transparency in terms, conditions, charges, and procedures related to such loans, both at the time of sanction and during the loan tenure.

4. Regulatory Intent

With these Directions, the RBI seeks to mitigate operational and reputational risks, ensure borrower protection, and promote prudent lending by aligning collateral-backed lending practices with best standards of governance.

Click Here To Read The Full Circular