Calculator
FAQs
Videos
Rs. 5,000 - Rs. 2 crore
To find the nearest gold loan branch,
Enter phone and OTP | Check amount you can get | Apply for quick funds
In Summary
- Understand the latest RBI guidelines for gold loan effective from 1 April 2026.
- Learn about the updated LTV ratios, eligible collateral types, and borrower limits.
- Explore the new rules on gold valuation, auctions, renewals, and top-ups.
- Know how the revised guidelines improve transparency and borrower protection.
- Check the eligibility criteria and understand how these changes may affect your gold loan.
This page covers the new RBI guidelines for gold loan, including the latest regulatory updates, revised lending norms, borrower safeguards, and the key changes you should know before applying for a gold loan.
What are the new RBI guidelines for gold loans?
The RBI guidelines for gold loan, effective from 1 April 2026, introduce important changes to improve transparency, strengthen borrower protection, and standardise gold lending practices across banks and NBFCs. The updated rules cover areas such as eligible collateral, Loan-to-Value (LTV) limits, gold valuation, auction procedures, loan renewal, and top-up facilities.
These revised guidelines also define the types of gold that can be pledged, the maximum borrowing limits, and the process lenders must follow while valuing and returning pledged gold. Understanding these changes can help you make informed borrowing decisions, know your rights as a borrower, and ensure a smoother gold loan experience under the latest RBI regulations.
No loans for purchasing gold
Under the RBI rule for gold loan, banks and NBFCs can no longer provide loans to purchase gold in any form. This restriction applies to gold jewellery, coins, ETFs, mutual funds, and other gold-based investment products. If you plan to buy gold, you will need to arrange funds through other financing options.
This change is intended to discourage speculative gold purchases using borrowed money and ensure that gold loans are used for genuine financial needs, such as medical emergencies, education, business requirements, or other personal expenses. Understanding this update can help you make informed borrowing decisions under the latest RBI guidelines.
Restrictions on lending against raw gold and financial products
Institutions are also barred from granting loans against raw gold, silver, or financial products backed by them. This means that loans can only be secured against processed gold items like jewellery, ensuring that the gold has a clear and verifiable value.
Collateral type and the accepted eligibility
Following the recent amendment, Bajaj Finance has updated its eligibility criteria and services to comply with the new guidelines. Earlier, only gold jewellery was accepted as collateral for gold loans. Now, Bajaj Finance also accepts gold coins, ornaments, and other types of jewellery.
The single borrower limits for each collateral type are as follows:
- Ornaments: A borrower can pledge up to 1 kilogram in total across all loans.
- Coins: The total pledged weight cannot exceed 50 grams.
- Jewellery: The limit is determined by the maximum loan amount offered by Bajaj Finance.
- Overall exposure: The combined total of ornaments, coins, and jewellery pledged by a customer cannot exceed the maximum loan limit of ₹2 crore.
With these updated rules, it is now easier to pledge different forms of gold. You can quickly check your gold loan eligibility to see how much you can borrow against your ornaments, coins, or jewellery.
New areas where gold loans are now allowed
The RBI has broadened the scope of lending against gold with several relaxations:
- Working capital beyond jewellers: Previously, only jewellers could avail loans against gold for working capital. Now, this facility extends to all manufacturers using gold or silver as raw material.
- Inclusion of smaller banks: Smaller urban co-operative banks in Tier 3 and Tier 4 cities are now permitted to lend against bullion, increasing accessibility for borrowers in these regions.
- Extended repayment for gold metal loans (GML): The repayment period for GMLs may go up to 270 days, also covering outsourced jewellery makers. This extension provides borrowers with more time to repay their loans, easing financial pressure.
What are the new LTV ratios for gold loans?
The RBI has set stricter loan-to-value (LTV) ratios to mitigate risks:
- Loans Under Rs. 2.5 lakh: The LTV ratio for these loans has been increased to 85%, up from the previous 75%. This change allows borrowers to access higher loan amounts against their gold.
- Loans Between Rs. 2.5 lakh and Rs. 5 lakh: The LTV ratio remains at 80%.
- Loans Above Rs. 5 lakh to Rs. 2 crore: The LTV ratio is capped at 75%.
It's crucial to check your gold loan eligibility to understand how these LTV ratios apply to your specific situation, so you know the maximum amount you can secure under the new limits.
Transparent auction process in defaults
If a gold loan remains unpaid even after repeated reminders, the lender may auction the pledged gold to recover the outstanding dues. Under the latest RBI guidelines, the auction process has been standardised to ensure greater transparency and protect borrowers' interests. Lenders must follow a defined procedure before conducting an auction and handle any surplus proceeds fairly.
- Advance communication: Borrowers must receive prior notices through appropriate communication channels before the pledged gold is auctioned.
- Fair reserve price: The reserve price should generally be fixed at 90% of the prevailing market value. If two auction attempts are unsuccessful, it may be reduced to 85% of the market value.
- Transparent recovery: Only the outstanding loan amount, interest, and applicable charges can be recovered through the auction.
- Refund of surplus: If the auction fetches more than the amount due, the remaining balance must be returned to the borrower within the prescribed timeline.
- Documented process: Lenders are required to maintain proper records of the auction process to ensure compliance with RBI guidelines and fair treatment of borrowers.
Steps involved in the Bajaj Finance’s auction process:
Bajaj Finance follows a 5-step escalation before auctioning pledged gold to provide borrowers with sufficient notice and an opportunity to repay their outstanding dues before any recovery action is initiated.
- SMS reminders are sent to customers at regular intervals regarding the outstanding principal and interest.
- A physical letter is sent after the loan matures, requesting the customer to clear the outstanding principal and interest.
- If the dues remain unpaid, the customer is informed about the proposed auction process.
- Newspaper advertisements are published with the auction date and relevant details for eligible cases.
- A final auction intimation letter is issued before the auction is conducted.
If the outstanding dues remain unpaid after these steps, Bajaj Finance proceeds with the auction process in accordance with the latest RBI guidelines to recover the outstanding loan amount.
Faster return of pledged gold
To safeguard borrowers, the RBI mandates that lenders return the pledged gold either on the same day or within seven working days after the loan is closed. If they fail to do so, a penalty of ₹5,000 for each day of delay will be charged. This step ensures timely release of your gold once the loan is repaid.
Key risks to know before taking a gold loan
Before taking a Gold Loan, understand the key risks, including gold auction in case of default, overall borrowing costs, loan eligibility limits and repayment obligations. Knowing the applicable RBI guidelines for gold loan and the relevant gold loan rule can help you make informed borrowing decisions.
- Risk of auction: Failure to repay as agreed may result in the lender auctioning the pledged gold after following the applicable process.
- Total borrowing cost: Interest, processing fees and other applicable charges can increase the overall cost.
- Loan eligibility limits: The loan amount depends on gold purity, net weight, valuation and applicable LTV limits.
- Repayment responsibility: Choosing a loan amount and tenure that suit your repayment capacity can help reduce the risk of default.
Note: Starting 1st April 2026, the new RBI rules for gold loans will be effective with Bajaj Finance. *
Calculate your gold loan
Not your nearest branch?
Frequently asked questions
Gold Loan Rules
No, the RBI has made it clear that NBFCs cannot lend against raw gold, bullion, or gold bars. Only gold jewellery, approved coins, or ornaments are considered eligible for loans. This ensures safer lending practices and reduces risks for both lenders and borrowers.
The new RBI guidelines for gold loans will officially come into effect from April 1, 2026. Borrowers and lenders alike will need to follow these updated rules, which bring more clarity, flexibility, and transparency to the gold loan framework in India.
The new RBI gold loan regulations strengthen borrower protection by introducing transparent gold valuation methods, revised Loan-to-Value (LTV) limits, fair auction procedures, and timely return of pledged gold after loan closure. They also require lenders to provide advance auction notices and compensate borrowers for delays in releasing pledged gold due to the lender's fault.
The latest RBI rules for gold loans, effective from 1 April 2026, specify eligible collateral, revised LTV ratios, standardised gold valuation based on IBJA or a SEBI-regulated commodity exchange, transparent auction procedures, and rules for loan renewals and top-ups. These guidelines aim to make gold lending more transparent and consistent across lenders.
Related Articles
Disclaimer
Bajaj Finance Limited (BFL) has the sole and absolute discretion, without assigning any reason to accept or reject any application as per BFL policy. *