Finshots Daily What you need to know about loans against silver
Oct 29, 2025
The podcast explores RBI's fresh regulations on loans against silver, uncovering why silver has historically been less popular than gold. It dives into lenders' concerns about storage, volatility, and the risks associated with silver collateral. The new rules aim to standardize lending practices, enhancing access for millions of silver holders. The discussion highlights how these changes will benefit small borrowers and the significance of adjusting loan-to-value limits. Overall, it presents a major shift in the perception and use of silver in lending.
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Why Gold Dominates Secured Loans
- Gold became the dominant loan collateral because it is compact, liquid, and historically trusted by banks.
- Silver lagged due to storage costs, higher volatility and weaker resale liquidity which scared lenders away.
Gold vs Silver: The Storage Example
- 1 lakh rupees of gold weighs about 8 grams while the same value of silver is over 600 grams according to the episode's example.
- That bulk creates much higher storage, security and insurance costs for lenders handling silver collateral.
Silver's Volatility Raises Lender Risk
- Silver is more tied to industrial demand and can be two to three times more volatile than gold.
- That volatility and lower liquidity make recovering funds from defaulted silver collateral riskier for lenders.