The New Regulatory Framework
Starting from October 1, 2025, the Reserve Bank of India (RBI) has barred banks and NBFCs from sanctioning loans explicitly for gold or silver purchases, including jewellery, coins, bars, and ETFs. Nor can they issue loans against unprocessed gold or silver.
The amended Clause 12 of the directive titled “Lending Against Gold & Silver Collateral Directions, 2025” says
12. A lender shall not grant any advance or loan: 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 against primary gold or silver or financial assets backed by primary gold or silver. |
Instead, financing is limited to businesses that use gold or silver as a raw material for manufacturing or processing. The RBI's rationale is that this ban is implemented “due to speculative and non-productive nature of gold. ” These moves com in the wake of soaring gold prices this year, which may only be exacerbated by speculative buying and selling.
Stricter rules on valuation, repayment, and auction procedures have been introduced. From April 2026, gold loans will follow tiered Loan to Value Ratios (LTVs) as follows, and lenders must return the pledged gold within seven working days of closing the loan.
Loan taken (₹) | LTV (%) |
| up to 2.5 lakh | 85 |
| 2.5–5 lakh | 80 |
| above 5 lakh | 75 |
Impact on Wedding Buyers & Gold Shoppers
For those who are planning purchases gold jewellery for the upcoming wedding season, this regulatory shift has direct and immediate consequences:
| No “gold purchase loans” from banks/NBFCs | You can no longer borrow specifically for new gold purchases. |
| Personal loans, unsecured loans, or credit card EMIs: | You can still use these options for purchasing jewellery purchases. |
| Jeweller financing / in-house EMIs | You can buy jewellery from retailers on installment schemes, but remember that offer stricter terms or higher interest. |
| Pledging existing jewellery | You can still borrow against jewellery you already own, but stricter norms now apply on valuation, auctions, and repayment. |
Plan Purchases with Discipline
Here are some tips to meet the need for gold jewellery during the wedding season:
- Plan much earlier than you were used to.
- Save money in advance so that you can pay in lumpsum cash.
- Reduce the quantum of jewellery.
- Compare interest rates for personal loans, credit card EMIs and in-store financing.
- Compare EMI rates and down payments across stores, if you opt for jeweller financing.
- Pledge or exchange old gold jewellery to offset the cost of buying new gold jewellery.
Looking Ahead
These directives are part of RBI’s broader agenda to curb speculative credit and ensure that capital flows toward productive uses in manufacturing, rather than inflating the value of assets, which can lead to bubbles. Whether you are a wedding planner or retail jewellery buyer, the key is adapting now:
- Rework your financing strategy as above
- Consider credit alternatives like personal loans, and
- Factor in potential cost increases at jewellers.
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