Gold and Silver as collateral for Agricultural and MSME Loans
Use of Gold and Silver as Voluntary Collateral for Agricultural and MSME Loans
Lending Against Gold and Silver Collateral – Voluntary Pledge of Gold and Silver as Collateral for Agriculture and MSME Loans
This is in continuation of our earlier communication (Circular No. FIDD.CO.FSD.BC.No.10/05.05.010/2024-25 dated December 6, 2024) concerning the extension of collateral-free credit to the agriculture sector, as well as Paragraph 4.1 of the Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 on Lending to Micro, Small and Medium Enterprises (updated as on June 11, 2024).
- Attention is also drawn to the Reserve Bank of India’s guidelines titled Lending Against Gold and Silver Collateral Directions, 2025 (Notification No. DOR.CRE.REC.26/21.01.023/2025-26 dated June 6, 2025).
- In this context, it is clarified that when borrowers voluntarily offer gold or silver as collateral for loans—where the sanctioned amount falls within the collateral-free threshold specified in the aforementioned circulars and guidelines—such lending will not be treated as a breach of the collateral-free lending norms.
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