Reserve Bank of India (RBI) has issued a clarification via notification RBI/2025-2026/66 dated July 11, 2025, concerning loans against voluntary pledges of gold and silver as collateral for agricultural and MSME borrowers. The circular is addressed to all Scheduled Commercial Banks, including Regional Rural Banks (RRBs), Small Finance Banks, and Cooperative Banks. Referring to earlier directives on collateral-free agricultural loans and MSME lending norms, the RBI emphasized that voluntarily pledged gold and silver for loans up to the specified collateral-free limit will not be considered a violation of existing collateral-free lending guidelines.
This clarification is aligned with previous documents, including the circular dated December 6, 2024, on collateral-free agricultural credit and the Master Direction on MSME lending updated as of June 11, 2024. It also refers to the RBI’s June 6, 2025, directions on lending against gold and silver collateral. The aim is to enhance credit flow without contravening regulatory intent, provided that the collateral is pledged voluntarily by the borrower and within the defined limits. However, it is noted that the exemption regarding voluntary collateral use does not apply to RRBs, State Cooperative Banks, and District Central Cooperative Banks, as per the earlier Master Direction.
This move is intended to facilitate smoother access to credit for agriculture and MSME sectors, using gold and silver assets, while maintaining adherence to collateral-free policy frameworks.
Reserve Bank of India.
India’s Central Bank
Notifications
Lending Against Gold and Silver Collateral – Voluntary Pledge of Gold and Silver as Collateral for Agriculture and MSME Loans
RBI/2025-2026/66
FIDD.CO.FSD.BC.No.08/05.05.010/2025-26 Dated: July 11, 2025
The Chairman / Managing Director / Chief Executive Officer
All Scheduled Commercial Banks
(including Regional Rural Banks and Small Finance Banks)
All State Co-operative Banks and District Central Co-operative Banks
Madam/Sir,
Lending Against Gold and Silver Collateral – Voluntary Pledge of Gold and Silver as Collateral for Agriculture and MSME Loans
Please refer to our circular FIDD.CO.FSD.BC.No.10/05.05.010/2024-25 dated December 6, 2024 on Credit Flow to Agriculture – Collateral free agricultural loans, and Para 4.1 of the Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017 on Lending to Micro, Small & Medium Enterprises (MSME) Sector (Updated as on June 11, 2024)1.
2. Reference is also invited to the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025, DOR.CRE.REC.26/21.01.023/2025-26, dated June 6, 2025.
3. In this regard, it is clarified that loans against voluntary pledge of Gold and Silver as collateral by borrowers, sanctioned by the banks upto the collateral free limit, as covered under the Circular / Master Direction referred to in para 1 above, will not be construed as a violation of the above-mentioned guidelines as regards such collateral.
Yours faithfully,
(R Giridharan)
Chief General Manager
Notes:
1 Not applicable to Regional Rural Banks, State Co-operative Banks and District Central Co-operative Banks
