**Executive Summary**
This document outlines the first amendment to the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025. These amendments, issued by the Reserve Bank of India on September 29, 2025, clarify existing regulations based on market feedback. The amendments are effective from October 1, 2025, for lenders that have already adopted the Directions.
**Key Points / Main Content**
* **Amendment to Paragraph 12:**
* Clarifies restrictions on lending against gold and silver collateral:
* Prohibits loans for the purchase of gold in any form (primary gold, ornaments, jewellery, coins) or financial assets backed by gold (e.g., ETFs, mutual funds).
* Prohibits loans against primary gold or silver or financial assets backed by primary gold or silver (e.g., ETFs, mutual funds).
* Exception: Scheduled Commercial Banks or Tier 3/4 UCBs may provide need-based working capital finance to borrowers using gold or silver as raw materials in manufacturing. These banks must ensure borrowers do not acquire gold for investment/speculation.
* **Amendment to Annex 2:**
* Inserts the following circulars after serial number 17:
* DBOD.No.Dir.BC.57/13.03.00/2012-13 dated November 19, 2012. Subject: Bank Finance for Purchase of Gold
* RPCD.CO.BC. 50/03.05.33/2012-13 dated December 5, 2012. Subject: Bank Finance for Purchase of Gold
* UBD.BPD.(PCB) Cir No.36/ 13.05.001/2012-13 dated February 6, 2013. Subject: Bank Finance for Purchase of Gold
* RPCD.RCB.BC.No.64/07.51.014/2012-13 dated February 7, 2013. Subject: Bank Finance for Purchase of Gold
* **Effective Date:**
* Amendments are effective from the date of adoption of the Directions.
* For lenders that have already adopted the Directions, the amendment is effective from October 1, 2025.
**Impact Analysis**
**Lenders (Scheduled Commercial Banks, Tier 3/4 UCBs)**
**Impact**
* Greater clarity on permissible and prohibited lending practices related to gold and silver collateral.
* Scheduled Commercial Banks and Tier 3/4 UCBs are provided an exception for working capital finance.
**Action Required**
* Ensure lending practices align with the amended Directions, specifically regarding gold/silver purchases and financial assets backed by them.
* For Scheduled Commercial Banks and Tier 3/4 UCBs, adhere to the conditions for providing working capital finance (raw material usage, no investment/speculation).
**Borrowers Using Gold/Silver as Raw Material**
**Impact**
* Potential access to working capital finance from Scheduled Commercial Banks and Tier 3/4 UCBs.
**Action Required**
* Comply with lender requirements regarding the use of gold/silver as raw material and not for investment/speculation.
Key Entities Referenced
Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025: Primary subject of the document, outlining regulations for lending against gold and silver collateral.
Reserve Bank of India: The regulatory body issuing the directions, central to the policy's enforcement and scope.
Banking Regulation Act, 1949: Legal framework granting powers to the Reserve Bank of India to issue the directions.
Scheduled Commercial Bank: Specifically mentioned as being able to extend need-based working capital finance to borrowers who use gold or silver
भारतीय ररज़र्व बैंक
________________________RESERVE BANK OF INDIA________________________
www.rbi.org.in
RBI/2025-26/84
DOR.CRE.REC.52/21.01.023/2025-26 September 29, 2025
Reserve Bank of India (Lending Against Gold and Silver Collateral) –
(1st Amendment) Directions, 2025
Reserve Bank had issued Reserve Bank of India (Lending Against Gold and Silver
Collateral) Directions, 2025 (hereinafter referred to as “the Directions”). Upon a review
based on market feedback, certain amendments are envisaged with a view to
clarifying certain aspects.
2. Accordingly, in exercise of the powers conferred by the sections 21, 35A and 56 of
the Banking Regulation Act, 1949; Sections 45JA, 45L and 45M of the Reserve Bank
of India Act, 1934; and Sections 30A, 32 and 33 of the National Housing Bank Act,
1987, and all other laws enabling the Reserve Bank in this regard, the Reserve Bank,
being satisfied that it is necessary and expedient in the public interest to do so, hereby
issues the Amendment Directions hereinafter specified.
3. The proposed amendments modify the Directions as under:
(i) Paragraph 12 shall stand amended with the insertions and deletions as
highlighted:
12. A lender shall not grant any advance or loan:
(i) for purchase of gold in any form including primary gold,
ornaments, jewellery, or coins, or for purchase of financial assets
backed by gold, e.g., units of Exchange-traded funds (ETFs) or
units of Mutual Funds; and
(ii) against primary gold or silver or financial assets backed by
primary gold or silver., e.g., units of Exchange-traded funds
(ETFs) or units of Mutual Funds.
Provided that a Scheduled Commercial Bank or a Tier 3 or 4 UCB may
extend need-based working capital finance to borrowers who use gold
or silver as a raw material, or as an input in their manufacturing orindustrial processing activity, for which such gold or silver can also be
accepted as security. A bank extending such finance shall ensure that
borrowers do not acquire or hold gold for investment or speculative
purposes.
(ii) In Annex 2, the following shall be inserted after serial number 17, namely:
Sl Circular No. Date Subject
No.
DBOD.No.Dir.BC.57/13.03.00/2012-13 November Bank Finance for
17A. 19, 2012 Purchase of
Gold
RPCD.CO.BC. 50/03.05.33/2012-13 December Bank Finance for
17B. 5, 2012 Purchase of
Gold
UBD.BPD.(PCB) Cir No.36/ 13.05.001/ February 6, Bank Finance for
17C. 2012-13 2013 Purchase of
Gold
RPCD.RCB.BC.No.64/07.51.014/2012-13 February 7, Bank Finance
17D. 2013 for Purchase of
Gold
4. These amendments shall come into force from the date of adoption of the Directions,
as provided under paragraph 4 thereof. For a lender that has already adopted the
Directions, the Amendment shall be effective from October 1, 2025.
(Vaibhav Chaturvedi)
Chief General Manager