New gold loan rules: The Reserve Bank of India (RBI) has introduced major changes in gold and silver loans-related rules. The new rules issued on June 6 are aimed at providing relief to borrowers and implementing strict guidelines for lending institutions. These rules will apply to all commercial banks, non-banking financial corporations (NBFCs), co-operative banks and housing finance companies.
New gold loan rules
Under the new rules, any person will eligible for a greater amount on their ornaments than before. Earlier, where up to 75% of the value of the gold could be availed as loan, now this limit has been increased to 85% on total loan (including interest) up to ₹ 2.5 lakh. For example, if someone has gold worth ₹1 lakh, they can now avail themselves of a loan of up to ₹85,000.
Gold loans up to ₹2.5 lakh will no longer require income verification or credit checks, making it easier for rural and low-income groups to get loans.
Loans with bullet repayment—where interest and principal are repaid together at the end—now have a maximum tenure of 12 months.
Under the new gold loan rules, Borrowers can now pledge gold or silver only up to a fixed limit: gold jewellery up to 1 kg, gold coins up to 50 grams, silver jewellery up to 10 kg and silver coins up to 500 grams. These limits are fixed for a borrower, regardless of the branch from which he has taken the loan.
Taking a stricter stance on banks and NBFCs, the apex bank has made it compulsory to return the gold or silver to the borrower on the same day he repays the amount or within the 7 working days failing which, the institution will have to pay compensation of ₹5,000 per day.
If the pledged gold or silver is lost or damaged during any audit or repayment process, the bank will have to fully compensate the borrower.
In case of non-payment of the loan, proper notice has to be given before the auction. The reserve price in the auction should be 90% of the market value, and if the auction fails twice, it can be kept up to 85%. The excess amount received from the auction must be returned to the borrower within 7 working days, as per the new gold loan rules.
The loan terms and valuation information should be given in the borrower’s preferred language or local language. Illiterate borrowers will be given this information in the presence of an independent witness.
These new gold loan rules will come into effect from April 1, 2026. Loans taken before will continue under the old rules. The purpose of these changes is to ensure transparency, equality and protection of borrowers in the rules related to gold loans.
