Daijiworld Media Network – New Delhi

New Delhi, Jul 11: In a move aimed at boosting credit access for rural and small borrowers, the Reserve Bank of India (RBI) on Friday clarified that banks can accept voluntarily pledged gold and silver for agricultural and MSME loans without violating collateral-free loan norms provided the loan amount remains within the defined ceiling.

This clarification comes in light of the RBI’s December 2024 circular on credit flow to agriculture and its Master Direction on MSME lending, which have often been interpreted restrictively by lenders.

In an official release, the central bank stated that such voluntary pledges by borrowers would not be considered a breach of existing guidelines, thereby opening up avenues for small farmers and micro enterprises to access formal credit using their personal gold and silver assets.

The RBI said the move is particularly significant for rural and informal sectors, where gold and silver are often the most readily available and trusted forms of security.

This development follows the RBI’s introduction of the Lending Against Gold and Silver Collateral Directions, 2025, in June, which aims to streamline regulations around loans backed by precious metals.