RBI Clarifies: Gold/Silver Pledging for MSE Loans Up to ₹20 Lakh Not a Violation

• RBI clarifies that voluntary pledging of gold/silver for MSE loans up to ₹20 lakh is not a violation of collateral-free lending rules.
• New rules, effective April 1, 2026, allow banks to accept gold/silver as collateral if offered voluntarily by borrowers.
• This change benefits asset-light micro and small enterprises, providing an additional financing opportunity.
• Voluntary pledging can improve creditworthiness, speed up loan processing, and potentially reduce loan costs.
• Collateral-free lending up to ₹20 lakh remains a borrower's right; banks cannot demand collateral.