Page 18 - Bullion World Issue 01 Volume 06 January_2026

Bullion World | Volume 6 | Issue 01 | January 2026

Silver as Collateral:

Promise, Pitfalls, and

the Path Forward

At Eventell Knowledge Series #62, organised by Bullion World, industry leaders came together to examine a
landmark development in India’s precious metals landscape-the RBI’s decision to recognise silver as eligible
collateral. As silver moves closer to gold as a financial asset, the webinar explored both its vast potential and
its complex realities. Moderated by Mr Srivatsava, the discussion featured insights from Mr Keyur Shah, Mr
Rajesh Bhan, Mr Anil Kansara, and other industry voices, offering a balanced, ground-level view on regulation,
technology, risk, and the collaborative path required to make silver-backed lending viable and responsible.

Silver as Collateral: financial instruments are explicitly excluded. Loans
Promise, Pitfalls, and the Path Forward must be backed by physical custody of the collateral
at the lender’s own branch, handled only by its
The Reserve Bank of India’s Lending Against Gold and employees, and supported by clearly defined SOPs
Silver Collateral Directions, 2025, issued in June 2025 covering assaying, valuation, storage, and auction
and effective from April 1, 2026, marks a significant procedures.
shift in India’s precious metals ecosystem. For the first
time, silver has been formally recognised as eligible Importantly, valuation must be based on actual purity,
collateral, placing it closer to gold as a financial asset. using reference prices such as IBJA or MCX rates
adjusted for fineness. RBI also places responsibility
India is estimated to hold 75,000–80,000 tonnes of on lenders to manage deterioration, discrepancy,
household silver, much of it lying idle. If even a small and purity risk during storage, an area where silver
portion of this stock enters the formal financial system, behaves very differently from gold.
it could improve liquidity, support household credit,
and enhance economic productivity. A Visionary Move, with Practical Questions

However, as highlighted during a detailed Bullion Mr Srivatsava contextualised the RBI’s decision as
World webinar, regulatory permission alone does not forward-looking, but emphasised that silver cannot
guarantee smooth execution. Silver lending presents simply be treated as “gold in another colour.” Gold
structural, technological, and behavioural challenges lending benefits from decades of standardisation,
that are fundamentally different from gold. widespread hallmarking, predictable purity ranges,
and quick branch-level testing using the black stone
Moderated by Mr Srivatsava, the discussion brought with some basic salts. Silver, by contrast, operates in
together Mr Keyur Shah, Mr Rajesh Bhan, and Mr Anil a fragmented and inconsistent ecosystem. There is no
Kansara offering an industry-wide perspective. industry-accepted simple method to test silver content
as yet.
Understanding the RBI Framework
The discussion therefore focused not on whether silver
The RBI directions clearly specify that only silver should be accepted as collateral, but how it can be
jewellery, ornaments, and coins are eligible as implemented responsibly without harming consumer
collateral. Primary silver bars, bullion, ETFs, and other trust or lender balance sheets.

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