RBI's New Gold Loan Rules Took Effect in April 2026

A gold loan is one of the most common ways Indians raise money against what they own. From 1 April 2026, the rules changed. The Reserve Bank of India brought in a revised framework for lending against gold, and it affects how much you can borrow and how your gold is handled.

Tiered loan-to-value limits

The old flat cap of 75% of the gold's value has been replaced by a sliding scale that gives smaller borrowers more:

So on a small loan, you can now borrow a larger share of your gold's value than before.

Rules on the pledged gold

The framework also tightens how lenders handle the metal you hand over:

• Pledged gold must be returned within 7 working days of you repaying the loan. If the lender is late, it owes you compensation of ₹5,000 per day of delay.
• The gold accepted as collateral is limited to 18 to 22 carat, along with eligible silver.
• For bullet-repayment loans, where you repay in one shot at the end, the term is capped at 12 months.
• Loan proceeds cannot be used to buy more gold or gold ETFs.

Why purity sits at the centre of this

A gold loan is only as sound as the valuation of the gold behind it, and valuation depends on purity. By limiting collateral to defined caratages, the rules lean on the same purity logic that hallmarking provides. Hallmarked jewellery, carrying a BIS mark and a HUID, states its fineness on the piece and makes that valuation cleaner for both sides. Unhallmarked gold has to be tested and is more likely to be valued conservatively.

What it means for borrowers

Three practical points:

1. On smaller loans you can now access more of your gold's value, up to 85%.
2. Keep the loan receipt and note the 7-working-day return rule; if your gold is not returned on time, you are owed ₹5,000 a day.
3. Hallmarked jewellery tends to get a cleaner valuation, because its purity is already certified.

What it means for jewellers and lenders

For jewellers who offer or refer gold loans, and for lenders, the framework rewards accurate purity assessment and clean custody of pledged items. It is another reason the certified-purity habit, hallmark and HUID, matters beyond the point of sale.