RBI gold loan rules 2026

What changed on 1 April 2026

The single 75% loan-to-value ceiling that had applied to gold loans was replaced by a tiered structure, so smaller borrowers can now borrow a larger share of their gold's value. Alongside that, the directions standardise how gold is valued, cap the tenor of bullet-repayment consumption loans, set out what a lender must tell you before an auction, and put a deadline — with compensation attached — on returning your gold after you repay.

• Tiered loan-to-value ceilings replace the flat 75% limit (para 19).
• A single valuation basis for all lenders, using published reference prices (para 17).
• Bullet-repayment consumption loans capped at a 12-month tenor (para 15).
• You must be present while your gold is assayed, and receive a certificate of what was assessed (paras 23, 27).
• Your gold must be returned within seven working days of full repayment, with compensation for delay (paras 35, 46).
• Loans sanctioned before the directions were adopted continue under the earlier rules (para 4).

Tiered loan-to-value, explained

Loan-to-value is your loan amount divided by the value of the gold securing it. The ceiling now depends on how much you borrow in total against gold collateral. The ratio has to be maintained throughout the loan, not just measured once at sanction (para 20) — which is why a fall in the gold price can push an untouched loan above its ceiling.

The tiers are set on the total amount lent against eligible collateral to one borrower, so several small loans do not each get the 85% ceiling.

Bullet loans versus EMI loans

On an EMI loan you repay principal every month, so your outstanding balance falls steadily and each payment widens the gap between what you owe and what your gold is worth. On a bullet loan you service interest only and repay the entire principal at maturity, so the outstanding amount does not move at all — the ratio changes only when the gold price does. That is the structural reason bullet borrowers have felt the recent price fall much more sharply.

• For bullet loans, the loan-to-value calculation must take into account the total amount repayable at maturity — principal plus the interest that will have accrued — not just the sum you received (para 5).
• Bullet-repayment consumption loans are capped at a 12-month tenor (para 15).
• A bullet loan may be renewed only after accrued interest is paid, provided the loan is standard and remains within the permitted loan-to-value (para 11).

The practical effect of the first point is that a bullet loan starts closer to its ceiling than the cash you received would suggest, because the interest that will accrue is counted from the outset.

How lenders value your gold

The directions fix a single valuation basis, which removes most of the variation that used to exist between lenders. Gold is valued at the reference price for its actual purity, taking the lower of the average closing price over the preceding 30 days and the closing price on the preceding day, as published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange (para 17). Taking the lower of the two is deliberately conservative: after a price run-up, the 30-day average holds the valuation down.

• Only the intrinsic value of the gold or silver content is counted. Making charges, gemstones and other cost elements are excluded (para 18).
• You must be present while your gold is assayed, and the deductions for stone weight, fastenings and alloy must be explained to you (para 23).
• You must receive a certificate recording purity in carats, gross weight, net metal content, deductions, any damage or defects noticed, an image of the collateral, and the value arrived at (para 27).
• A borrower may pledge at most 1 kg of gold ornaments, 50 g of gold coins, 10 kg of silver ornaments or 500 g of silver coins in aggregate (para 16).
• Lenders may not lend against primary gold or silver, or against gold-backed ETF or mutual fund units, nor lend for the purchase of gold in any form (para 12).

Because the valuation follows actual assessed purity rather than the stamp on the piece, non-hallmarked jewellery is often assessed lower than its marking implies. This is the single biggest reason a market-price estimate can overstate what your lender actually valued.

What a margin call is

A margin call is a request from your lender to restore the agreed ratio between your loan and the value of your gold. It arises because the directions require the loan-to-value ratio to be maintained on an ongoing basis throughout the loan (para 20) — so when the gold price falls, a loan that was compliant at sanction can drift above its ceiling without the borrower having done anything. The lender asks you to close that gap, usually by repaying part of the principal or by pledging additional gold.

• It is triggered by the price of gold, not by anything you did or failed to do.
• It is a risk-management step built into secured lending, not a penalty and not a default.
• The circular sets the ongoing ratio requirement but leaves the mechanics — thresholds, buffers, how much notice — to each lender's own credit policy (para 8), which is why practice varies and why only your lender can tell you their thresholds.

Receiving one does not mean your gold is about to be sold. Auction is a separate process with its own notice and disclosure requirements, described below.

Your options if you receive one

There are usually several ways to respond, and they carry different trade-offs. None of them is recommended here — the right choice depends on your income, your other commitments and how long you expect to hold the loan.

Your rights as a borrower

The directions put specific obligations on lenders around auctions, disclosure and the return of your gold. These are the ones most worth knowing.

• Before starting an auction, the lender must give you adequate notice through available means of communication to repay or settle the dues (para 37).
• The auction must be advertised publicly in at least two newspapers, one in the regional language and one national daily (para 38).
• The reserve price must be at least 90% of current value, falling to no less than 85% only if two auctions have already failed (para 40).
• The first auction must be held physically in the same district as the lending branch; only if it fails may it move to an adjoining district or go online (para 41).
• After the auction, the lender must give you full details of the price fetched and the dues adjusted, and refund any surplus within seven working days of receiving the proceeds (para 43).
• Your loan agreement must set out the auction procedure, the circumstances that lead to one, the notice period, the timeline for releasing your gold and the treatment of surplus (para 26).
• On full repayment, your gold must be released the same day and in any case within seven working days (para 35).
• If release is delayed for reasons attributable to the lender, you are entitled to ₹5,000 for each day of delay (para 46).

How to reduce margin call exposure

The ceiling is a maximum, not a target. Borrowing at the ceiling means any fall in the gold price puts the loan above it immediately; borrowing below leaves room to absorb a correction without anything being asked of you.

• Borrow below the maximum. On a loan at the 75% ceiling, a 10% fall in gold takes the ratio to about 83%. Borrowing at 60% instead, the same fall reaches only about 67%.
• An EMI structure reduces the outstanding balance every month, so the cushion grows over the life of the loan rather than staying flat.
• A shorter loan spends less time exposed to price movement, though it demands more cash flow each month.
• Keep the valuation certificate from your pledge. It is the only reliable basis for checking your own ratio later, and it is what makes an estimate like ours meaningful.
• If prices have moved a long way, ask your lender for your current ratio before they contact you. There is no downside to knowing early.