TL;DR
- Consumption gold loans now carry tiered LTV caps: 85 percent up to Rs 2.5 lakh, 80 percent to Rs 5 lakh, 75 percent above that.
- The slab is set by your total loan. On Rs 5,18,280 of gold, the maximum loan is Rs 4,14,624.
- Your gold is valued at the lower of the 30-day average price and the previous day price.
- You must be present at the assaying, and you must get a duplicate certificate.
- Your gold must come back within 7 working days of full repayment.
Take one borrower through this whole guide, so every number stays comparable. Meera is a borrower in Bengaluru. She pledges gold jewellery that weighs 42 grams gross. The assay finds 2 grams of stones and fastenings, so the net gold content is 40 grams of 22K gold. The price used in this guide is the IBJA 22K closing benchmark of 6 November 2026: Rs 1,29,570 per 10 grams, which is Rs 12,957 per gram. Her gold is worth 40 grams times Rs 12,957, which is Rs 5,18,280. Every table and every workbook sheet below uses this same borrower, the same gold, and the same price.
One reading rule. This page is general information on Indian banking rules as of November 2026, not legal, tax, or loan advice. Where a rule comes from an RBI direction, this page names the direction and quotes its wording. Where a cutoff or a timeline comes from lender policy, this page says so, because policies vary by lender. Only your loan agreement and Key Facts Statement bind your lender. Our sanction letter guide teaches how to read those documents clause by clause.
What did the RBI gold loan Directions 2025 change?
The Reserve Bank of India issued the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025, on 6 June 2025 as RBI/2025-26/47, and amended them on 29 September 2025 as RBI/2025-26/84. The Directions replace the earlier circulars with one set of rules for every regulated lender: commercial banks, small finance banks, local area banks, regional rural banks, co-operative banks, NBFCs and housing finance companies. Payments banks are excluded. Lenders had to comply as soon as possible and no later than 1 April 2026. Loans sanctioned before a lender adopted the Directions stay under the earlier guidelines.
The change that matters most to a borrower is the LTV slab. Before these Directions, the headline rule most borrowers knew was a flat 75 percent cap. The 2025 Directions replace it with tiered caps for consumption loans: 85 percent up to Rs 2.5 lakh, 80 percent above Rs 2.5 lakh up to Rs 5 lakh, and 75 percent above Rs 5 lakh. A page that still states a flat 75 percent cap as current law is out of date. The rest of the change is conduct: standard assaying, borrower presence at valuation, a duplicate certificate, a 12-month cap on bullet consumption loans, and fixed timelines for return of collateral and for auction surplus refunds.
The Directions did not come out of nowhere. On 30 September 2024, the RBI issued a circular on irregular practices in gold loans, RBI/2024-25/77, after a review and onsite examination of select lenders. It found valuation done without the customer present, third parties doing sourcing and appraisal, end use not monitored, opaque auctions, weak LTV monitoring, and top-ups used to evergreen overdue loans. The 2025 Directions answer each of those findings with a written rule. One report at the time put the gold loan market at over Rs 10 trillion and growing at over 18 percent, which is why the RBI moved to one harmonised framework instead of separate rules per lender type.
How much can I borrow on my gold under the LTV slabs?
The maximum LTV for a consumption loan turns on your total consumption loan per borrower, not on the value of your gold. The table below is paragraph 19 of the Directions. Read the first column as the size of your total loan, and the second column as the most the lender may lend against the value of your gold.
| Total consumption loan per borrower | Maximum LTV |
|---|---|
| Up to Rs 2.5 lakh | 85 percent |
| Above Rs 2.5 lakh up to Rs 5 lakh | 80 percent |
| Above Rs 5 lakh | 75 percent |
The slab applies to the whole loan, not to slices of it. That is the point most summaries get wrong, and it changes the answer by real money. Work it on Meera. Her gold is worth Rs 5,18,280. At 85 percent, the loan would be Rs 4,40,538. But that total is above Rs 2.5 lakh, so it cannot sit in the 85 percent slab. At 80 percent, the loan is Rs 4,14,624, and that total sits inside the above Rs 2.5 lakh to Rs 5 lakh band, so it is valid. At a flat 75 percent, the loan would be Rs 3,88,710. So the correct maximum loan is Rs 4,14,624: Rs 25,914 less than the naive 85 percent figure, and Rs 25,914 more than the flat 75 percent figure.
| Figure | Amount | How it is worked |
|---|---|---|
| Net gold content | 40 grams of 22K | 42 grams gross minus 2 grams of stones and fastenings |
| Price per gram | Rs 12,957 | IBJA 22K close of 6 November 2026, Rs 1,29,570 per 10 grams |
| Value of pledged gold | Rs 5,18,280 | 40 grams times Rs 12,957 |
| At 85 percent | Rs 4,40,538 | Invalid: the total is above Rs 2.5 lakh, so the 85 percent slab cannot apply |
| At 80 percent | Rs 4,14,624 | Valid: the total sits inside the Rs 2.5 lakh to Rs 5 lakh band |
| At flat 75 percent | Rs 3,88,710 | Understates the correct maximum by Rs 25,914 |
| Maximum loan | Rs 4,14,624 | The largest loan that fits its own slab |
A smaller pledge shows the other side of the same rule. Suppose Meera pledges only 20 grams net of 22K gold. The value is 20 grams times Rs 12,957, which is Rs 2,59,140. At 85 percent, the loan is Rs 2,20,269. That total is below Rs 2.5 lakh, so the 85 percent slab applies and Rs 2,20,269 is the maximum. The same gold at a different weight lands in a different slab, so always work the slab from the loan total, never from the gold value alone.
Two more points on LTV. First, the total counts all your gold and silver loans with that lender, not one loan at a time. A second loan that pushes your total above Rs 2.5 lakh moves the whole position into the 80 percent slab. Second, the LTV must be maintained through the whole tenor, not only on day one. If the gold price falls 20 percent, her gold is worth Rs 4,14,624, which is exactly the loan amount, so the LTV hits 100 percent. The lender policy must state what happens on a breach, so ask what the lender does when the price falls: a margin call, a part payment, or extra collateral are all lender policy, not RBI rules.
How does the lender value my gold at the counter?
The lender values your gold at its actual purity, at the lower of two prices: the average closing price of that purity over the preceding 30 days, or the closing price of that purity on the preceding day. The price must come from the India Bullion and Jewellers Association or from a commodity exchange regulated by SEBI. If no price exists for your exact purity, the lender uses the nearest available purity and adjusts the weight in proportion. Only the intrinsic value of the gold or silver counts. Stones, gems and other non-metal parts add nothing to the value.
The lower-of rule protects the lender when the price is falling, and it trims your loan when the price is rising. Her gold is valued here at the 6 November 2026 close of Rs 12,957 per gram for 22K gold, as a single-day illustration. On a real sanction day, the lender compares the 30-day average with the previous day close and takes the lower figure, so the value on your certificate may be below the price you saw in the newspaper that morning. The lender must display its net weight method and the price it uses on its website, so you can check the method before you walk in.
The contrast with a house valuation is sharp. A property valuer inspects the flat, checks the papers, and gives an opinion of market value, which is why two valuers can differ by lakhs. A gold valuation is arithmetic: weight times purity times a published price. Our loan against property appraisal guide explains how property valuers work, and the difference is the point: with gold, the argument is about the weight and the purity on the certificate, not about an opinion.
What should I check before I hand over my gold?
Stay at the counter while the gold is assayed. The Directions require the lender to ensure the presence of the borrower while assaying the collateral at the time of sanction. This rule exists because the 2024 RBI review found valuation done without the customer present. If the lender asks you to leave the gold and come back, that is not how the Directions describe the process.
| Check at the counter | What to look for | Why it matters |
|---|---|---|
| Gross weight | The full weight before deductions, weighed in front of you | The gross weight here is 42 grams; the net figure starts here |
| Deductions | Stone weight, lac, alloy, strings and fastenings, each listed | The deductions here are 2 grams; unexplained deductions cut your loan |
| Net weight and purity | Net gold content in grams and purity in carats | The net weight here is 40 grams at 22K; this is the number the loan is priced on |
| Damage and defects | Any breakage or defect noted on the certificate | A defect noted now cannot be blamed on you at return |
| Photograph | An image of the collateral on the certificate | The image proves which pieces you pledged |
| Value at sanction | The value worked from the net weight and the price used | The value here is Rs 5,18,280; the LTV slabs apply to this figure |
| Your copy | One copy of the certificate given to you under acknowledgement | The certificate is your proof at return and at auction |
The certificate is the document that protects you. The lender must prepare it in duplicate on its letterhead, with the purity in carats, the gross weight, the net weight of gold or silver content, the deductions, any damage or defects, an image of the collateral, and the value at sanction. One copy stays with the loan documents and the other goes to you under acknowledgement. Keep it with the loan agreement. At return, the lender must verify the collateral against the certificate to your satisfaction, so the certificate is what you compare against.
Read the charges before you sign. The loan agreement and the Key Facts Statement must clearly include all applicable charges, including assaying and auction charges. The amounts are set by the lender, not by the RBI, so compare them across lenders. Our penal charges guide explains how lenders charge for delays and defaults, and the same read-the-KFS discipline applies here. Communication must be in the language of the region or a language you choose, and for an illiterate borrower the important terms must be explained in the presence of a witness who is not a lender employee.
What gold can I pledge, and what is excluded?
Eligible collateral means jewellery, ornaments or coins made of gold or silver. That is the whole list. Her jewellery qualifies. Gold and silver in any other form count as primary gold or primary silver, and the Directions bar loans against them. A 24-carat bar with a dealer certificate is still primary gold, whatever its purity, because the test is the form, not the purity.
| Form | Eligible | Weight cap per borrower |
|---|---|---|
| Gold ornaments and jewellery | Yes | 1 kg across all loans |
| Silver ornaments and jewellery | Yes | 10 kg across all loans |
| Gold coins | Yes | 50 grams across all loans |
| Silver coins | Yes | 500 grams across all loans |
| Gold or silver bars, biscuits, bullion | No, primary gold or silver | Not applicable |
| Gold ETF or mutual fund units | No, financial assets backed by gold | Not applicable |
| Digital gold | No, not jewellery, ornaments or coins | Not applicable |
The caps count across all your loans with that lender, not per loan. Her 40 grams is far inside the 1 kg gold ornaments cap, so the cap does not bind her. A borrower with 900 grams already pledged can pledge only 100 grams more in ornaments, even at a different branch of the same lender. The lender must also refuse a loan where ownership of the collateral is doubtful, and it must obtain a document or declaration from you in all cases that you are the rightful owner. Multiple or frequent loans to the same borrower above a lender-decided threshold must be examined under the anti-money laundering framework.
A lender shall not grant a loan to buy gold in any form, or to buy financial assets backed by gold such as ETF or mutual fund units. The September 2025 amendment widened that ban to cover purchase of gold in any form, and it also bars loans against primary gold or silver and against financial assets backed by primary gold or silver. One narrow exception exists: a scheduled commercial bank or a Tier 3 or 4 urban co-operative bank may extend need-based working capital finance to borrowers who use gold or silver as a raw material or as an input in manufacturing or industrial processing, where the gold or silver can also be accepted as security. The bank must ensure those borrowers do not acquire or hold gold for investment or speculative purposes. That exception is for manufacturers, not for a borrower who wants to buy gold.
Do I need a detailed credit check for a small gold loan?
It depends on the total. The Directions let the lender choose its own approach, consistent with proportionality and ease of access for small ticket loans. But a detailed credit assessment, including assessment of repayment capacity, shall be undertaken where the total loan amount against eligible collateral is above Rs 2.5 lakh to a borrower. Her maximum loan of Rs 4,14,624 is above Rs 2.5 lakh, so her lender must do that assessment. The smaller 20-gram case, with a maximum loan of Rs 2,20,269, sits below the line, so no detailed assessment is required by the Directions. The lender may still run its own checks below the line, and many do, but that is lender policy, not an RBI requirement.
The assessment above the line looks at whether you can repay, not only at the gold. Our FOIR guide explains how lenders measure fixed obligations against income, and our CIBIL guide explains what officers actually check on a credit report. The Directions set no minimum credit score, so a lender that quotes a score cutoff is applying its own policy. Our credit appraisal guide walks through the whole appraisal in order, so you can see which step a gold loan file stops at.
Farm gold loans follow a different track. The Directions apply to consumption and income generating loans, including farm credit, but the 85, 80 and 75 percent slabs are for consumption loans only. A farm gold loan is an income generating loan, so its maximum LTV sits in the lender credit policy, not in paragraph 19. The lender policy must also include the documentation for loans categorised under priority sector lending, and the 2024 review found a lack of proof for agriculture gold loans, so expect the lender to ask for proof of farm use. Our priority sector lending guide explains which loans count as priority sector and what documentation they need.
Can I renew a gold loan or take a top-up?
Yes, on a formal request from you, and only on three conditions. The renewal or top-up must pass a credit assessment under paragraph 10, it must stay within the permissible LTV, and the loan must be classified as standard. A bullet repayment loan may be renewed only after payment of the accrued interest, if any. The lender must also make renewals and top-ups clearly identifiable in its core banking or loan processing system, so a renewal cannot hide as a fresh loan.
The bullet example shows why the interest-first rule matters. Suppose Meera borrows Rs 2,00,000 as a bullet loan at 12 percent a year for 12 months, sanctioned on Saturday 7 November 2026. The interest is Rs 24,000, so the total repayable at maturity on Sunday 7 November 2027 is Rs 2,24,000. For LTV, the Directions count that Rs 2,24,000, which is 43.2 percent of her gold value of Rs 5,18,280. She cannot renew that bullet loan by rolling the interest into a new loan. She must pay the Rs 24,000 of accrued interest first, and the renewal must still fit inside the LTV slab for her total loan.
The tenor cap is 12 months for a consumption loan in the nature of a bullet repayment loan. That cap is a hard RBI rule, not a lender convention. A renewal is a fresh decision, not an automatic extension, and a loan that is already overdue cannot be renewed into standard status. That is also why the 2024 review flagged evergreening: top-ups granted to cover delinquencies, with only part payment and no fresh appraisal, were one of the practices the RBI told lenders to stop. Our working capital renewal guide explains renewal for a business limit, and the contrast is useful: a working capital renewal reworks the whole limit, while a gold loan renewal reworks one loan against one parcel of gold.
What happens if I cannot repay and the lender auctions my gold?
The lender must give you adequate notice to repay or settle the loan before it starts the auction procedure, and it must keep a copy of the notice and the acknowledgement on record. If the lender cannot locate you or your legal heirs despite best efforts and even after a public notice, it may proceed only after one month has lapsed from the date of the public notice. The loan agreement must already describe the auction procedure, the circumstances that lead to auction, and the notice period allowed for repayment or settlement before auction, so read that clause when you sign, not when the notice arrives.
The auction itself must be transparent. The lender must announce it to the public by advertisement in at least two newspapers, one in the regional language and another in a national daily. The auction may be run only by a lender employee with the necessary experience or training, or by an auctioneer empanelled by the lender. The first auction must be conducted physically in the same district in which the lending branch is located. If it fails, the lender may conduct the auction in an adjoining district or online. The lender and its related parties shall not participate in the auctions, so the lender cannot buy your gold itself.
The reserve price is the floor that protects you. The lender shall declare a reserve price of at least 90 percent of the current value of the gold or silver. If the auction fails twice, the reserve price shall be at least 85 percent of the current value. On her gold, at the sanction value of Rs 5,18,280, the first reserve price would be Rs 4,66,452 and the reserve after two failed auctions would be Rs 4,40,538. The current value at auction will differ from the sanction value, so treat those figures as an illustration of the rule, not as a promise of the auction price.
After the auction, the lender shall mandatorily give you full details of the value fetched and the dues adjusted. Suppose the dues are Rs 3,00,000 and the auction fetches Rs 4,20,000. The surplus is Rs 1,20,000, and the lender shall refund it to you within a maximum of 7 working days from the date of receipt of the full auction proceeds. If the auction fetches less than the dues, the lender may recover the shortfall as per the terms of the loan agreement. A gold loan that turns NPA follows the same income recognition and asset classification rules as any other loan, and our IRAC guide explains SMA, NPA and upgradation for borrowers.
When do I get my gold back, and what if the lender is late?
The lender shall release or return your gold on the same day, and in any case within a maximum of 7 working days, after full repayment or settlement of the loan. At the time of release, the lender must verify the collateral against the certificate to your satisfaction. That is why the duplicate certificate matters: you compare the pieces, the weight and the purity against the certificate you hold, before you sign the acknowledgement.
Take the timeline for her loan. Her bullet loan matures on Sunday 7 November 2027. If she repays in full on that day, the lender must return her gold the same day and no later than 7 working days after. If the delay is attributable to the lender, the lender shall compensate her at Rs 5,000 for each day of delay beyond the timeline. A delay of 10 days beyond the deadline means Rs 50,000 in compensation. If the delay is not attributable to the lender, the lender must communicate the reasons to her. If she does not approach the lender for release after repayment, the lender must issue periodic reminders by letter, email or SMS where her email and mobile number are registered.
Damage and loss have their own rules. If the lender damages your gold during the tenor, the cost of repair is borne by the lender. If the gold is lost, or if a deterioration or discrepancy in quantity or purity is found during internal audit or at the time of return or auction, the lender shall suitably compensate you or your legal heirs. Cases of loss, deterioration or discrepancy must be recorded and communicated promptly, with the reimbursement or compensation process. The lender must also carry out periodic surprise verification of pledged gold and keep a record of it, and the loan agreement must include your consent to surprise verification including assay even in your absence during the tenor. That consent must be specifically communicated to you at sanction.
Gold left unclaimed has a clock of its own. Collateral lying with the lender beyond two years from the date of full repayment or settlement is treated as unclaimed. The lender must undertake special drives to trace the borrower or legal heirs, and a report on unclaimed collateral must go to the Customer Service Committee or the Board at half-yearly intervals. So even after you repay, collect the gold, check it against the certificate, and keep the release acknowledgement with the loan closure letter.
Sources
Primary sources: Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025, RBI/2025-26/47, dated 6 June 2025, consolidated text updated as on 29 September 2025, paragraphs 4 to 6, 8 to 13, 15 to 19, 21 to 24, 26 to 28, 35 to 37, 40 to 46 and 48, read on the RBI website on 2026-11-07; Reserve Bank of India (Lending Against Gold and Silver Collateral) (1st Amendment) Directions, 2025, RBI/2025-26/84, dated 29 September 2025, read on the RBI website on 2026-11-07; and RBI circular on irregular practices in gold loans, RBI/2024-25/77, dated 30 September 2024, read on the RBI website on 2026-11-07. Secondary sources, labelled as such in the text: IBJA 22K closing benchmark of 6 November 2026, Rs 1,29,570 per 10 grams, and 24K Rs 1,41,452 per 10 grams, via TrackLivePrice city gold-rate pages citing IBJA; gold loan market over Rs 10 trillion and growing at over 18 percent, New Indian Express, 30 September 2024. All worked example figures are recomputed by formula in the workbook.
External links: RBI (Lending Against Gold and Silver Collateral) Directions, 2025, RBI/2025-26/47, RBI (1st Amendment) Directions, 2025, RBI/2025-26/84 and RBI circular on irregular practices in gold loans, RBI/2024-25/77. All three pages were opened and returned 200 on 2026-11-07, and the document headings on the pages match the citations.
Frequently Asked Questions
Last updated: 7 November 2026. Framework cited: RBI (Lending Against Gold and Silver Collateral) Directions, 2025, RBI/2025-26/47, dated 6 June 2025, as amended by RBI/2025-26/84, dated 29 September 2025; RBI circular RBI/2024-25/77, dated 30 September 2024.
What is the maximum LTV on a gold loan now?
For a consumption loan, the maximum LTV depends on the total loan per borrower: 85 percent up to Rs 2.5 lakh, 80 percent above Rs 2.5 lakh up to Rs 5 lakh, and 75 percent above Rs 5 lakh. The slab is set by the total loan, not by the value of the gold.
Is the LTV 75 percent for every gold loan?
No. The 75 percent figure applies only to consumption loans above Rs 5 lakh per borrower. Smaller consumption loans get 85 percent up to Rs 2.5 lakh and 80 percent up to Rs 5 lakh. A farm or business gold loan follows the lender credit policy instead of these slabs.
Can I pledge gold bars or a gold ETF?
No. The Directions allow only jewellery, ornaments and coins made of gold or silver. Bars, biscuits and other bullion count as primary gold, and the Directions bar loans against primary gold and against financial assets backed by gold, such as ETF and mutual fund units.
Can I take a gold loan to buy more gold?
No. A lender shall not grant a loan for the purchase of gold in any form, including primary gold, ornaments, jewellery or coins, or for the purchase of financial assets backed by gold. The only narrow exception is working capital for manufacturers who use gold as a raw material.
How long can a bullet gold loan run?
A consumption loan in the nature of a bullet repayment loan is capped at 12 months. Both principal and interest fall due at maturity. Renewal is allowed only after the accrued interest is paid, only if the loan is standard, and only within the permissible LTV.
What is the reserve price at a gold loan auction?
The lender shall declare a reserve price of at least 90 percent of the current value of the gold or silver. If the auction fails twice, the reserve price shall be at least 85 percent of the current value. The lender and its related parties shall not take part in the auction.
How soon must the lender return my gold after I repay?
The lender shall return the pledged gold on the same day and in any case within a maximum of 7 working days after full repayment or settlement. If the delay is attributable to the lender, it shall pay Rs 5,000 for each day of delay beyond that timeline.
Gold loan slab checker workbook
Enter your gold weight, purity and price, and the workbook works out the value, the maximum loan under each LTV slab, and the correct maximum for your total loan, and checks every figure against this guide.