Why Banks Prefer Gold Over Silver for Loans: Unpacking the Reasons

• Banks primarily offer loans against gold due to its higher value and greater price stability compared to silver.
• Assessing silver's purity is complex as it lacks a universal hallmarking system like gold, making accurate valuation difficult.
• Silver's larger volume and lower value per weight lead to higher storage costs and operational challenges for banks.
• There is significantly lower market demand for silver loans, and banking regulatory guidelines are more easily applied to gold.
• While some NBFCs offer silver loans with higher interest rates, experts suggest future market changes could lead to new bank policies for silver.