Hi Team,
RBI recently announced that digital gold, gold etf and sgb types instruments can’t be pledged.
So would this be applicable to broking industry as well because I haven’t heard any broker talking about it.
Can we still pledge gold instruments and use the collateral for trading?
Thanks
Raj
This is the clause 12 of the recently issued RBI directive.
Restrictions and Ceilings
- A lender shall not grant any advance or loan against primary gold or silver or financial assets backed by primary gold or silver, e.g., units of Exchange-traded funds (ETFs) or units of Mutual Funds.
Combined with clause 5 of the RBI directive that includes NBFCs in the scope of the directive, loan against securities (LAS) appears to be within the scope of this directive i.e. no more LAS on gold/silver-linked securities.
However, the RBI directive also specifies
- Instructions issued vide these Directions shall be complied with as expeditiously as possible but no later than April 1, 2026. Loans sanctioned prior to the date of adoption of the Directions by the RE shall continue to be governed by the extant guidelines applicable before the issuance of these Directions.
Since there are more than 9 months left for everyone to be fully compliant,
we can expect further clarifications/notifications in the near future to avoid potential gray areas including MTF (Margin Trading, regulated by SEBI?) based on gold/silver-linked securities.
…until then, business as usual.
Source: Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025
Right but rbi mentioned commercial banks, co-operative banks, small finance banks, rural banks, NBFCs, and HFCs . Isn’t it?
Yes, and “NBFCs” will cover most new-age brokers.