New RBI Gold Loan Rules Kick in April 2026: Major Changes for Borrowers; All You Need To Know

The Reserve Bank of India (RBI) has announced a major revamp of gold and silver loan guidelines to make Gold borrowing simpler, faster, and even more secure. These new rules will apply from April 1, 2026, and will affect all banks, NBFCs, cooperative banks, and housing finance companies.

The new gold loan rules were released on June 6 in the RBI monetary policy decision by Governor Sanjay Malhotra. It will help to protect borrowers, especially those from rural or low-income backgrounds. So, If you're planning to take a loan against gold jewellery or silver, here are major changes gold loan rule you must know.

• Loans Below Rs. 2.5 Lakh Will have no Credit Check

RBI has removed the requirement for income proof or credit history for gold loans below Rs. 2.5 lakh. This makes it easier for farmers, daily wage earners, and small traders to access funds quickly.

• Loan-to-Value (LTV) Limit Raised to 85% for Loans up to Rs. 2.5 Lakh

The Reserve Bank of India (RBI) has revised the gold loan norms to benefit small borrowers. Where the Loan-to-Value (LTV) ratio from 75% to 85% for loans where the total exposure, including interest, does not exceed Rs. 2.5 lakh.

• Mandatory Same-Day Gold Return After Loan Closure

As per the new RBI guidelines, once you fully repay your gold or silver loan, the lender is required to return your pledged jewellery either on the same day or within 7 working days. If there is any delay beyond this period, the lender must compensate you with a penalty of ₹5,000 per day for unnecessary hold-ups.

• RBI Puts Cap on Gold and Silver Pledging to Curb Misuse

To tighten lending norms and curb the risk of over-leveraging, RBI has now introduced limits on the quantity of gold and silver that borrowers can pledge as collateral. As per the new rules, individuals can pledge up to 1 kg of gold jewellery and up to 50 grams of gold coins. Similarly, for silver, the limit is fixed at 10 kg for jewellery and 500 grams for silver coins. This may reduce the chances of fraud and ensure more responsible lending practices by banks and NBFCs. These limits apply per borrower across all branches of a lender.

• Mandatory Fair Auction Process

In case of loan default, RBI mandates a clear auction process, which says that Borrowers must get prior written notice. The Reserve price should be at least 90% of market value (can drop to 85% after 2 failed auctions). Additionally, If the gold is sold for more than the loan due, the surplus must be returned within 7 working days.

Moreover, If you're taking a gold loan where the full repayment (principal + interest) is made at once (bullet repayment), it must now be repaid within 12 months.

• Full Compensation for Lost or Damaged Gold

If the pledged gold or silver is lost, stolen, or damaged while under the custody of the lender, they must pay full compensation to the borrower based on current market value. Additionally, all Loan agreements, valuation slips, and repayment terms must be shared in the borrower's local or preferred language.