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RBI enables gold pledges for rural loans
The RBI just made it easier for farmers and small business owners in rural areas to get loans—banks can now accept gold and silver jewelry as collateral for loans up to ₹2 lakh.
This means people can unlock funds faster using assets they already have, especially when money is needed urgently, like during sowing season.
Key details of the new rule
This rule only applies to physical gold and silver (so no gold ETFs), and it's designed to speed up approvals while keeping the benefits of collateral-free loans.
Banks are expected to follow stricter repayment rules for these "gold loans," which should help borrowers avoid high-interest informal lenders and give banks a safer way to lend more in underserved communities.