Paul Merchants Finance Private Limited debuts India’s first dedicated silver loan branches, capitalising on RBI’s updated lending framework that recognises silver as a formal collateral option, signalling a shift in small-ticket borrowing practices.
Paul Merchants Finance Private Limited has launched loans against silver, positioning itself as what it says is India’s first non-banking finance company to open dedicated branches for the product. The move follows the Reserve Bank of India’s new framework allowing regulated lenders to accept silver as collateral, bringing a long-held household asset into the formal lending system.
The RBI issued its “Lending Against Gold and Silver Collateral Directions, 2025” on 6 June 2025, according to legal and industry commentary on the rules. Analysts and advisers have said the directions unify earlier circulars and create a single regulatory framework for lenders, with the aim of improving transparency and protecting borrowers.
Paul Merchants Finance said the new product is intended to give customers a more organised alternative to informal borrowing, where silver-backed credit has often been available only through local financiers. The company has started operations in Chandigarh and plans a phased rollout to other locations, supported by exclusive silver loan branches.
Under the offering, borrowers can seek loans from ₹2,000 to ₹15 lakh against eligible silver jewellery, ornaments and approved silver coins, subject to the company’s lending policies and regulatory requirements. The lender said the facility is aimed at individuals, sole proprietors and small businesses that need short-term liquidity for personal or business use.
The company’s management framed the launch as the beginning of a new secured lending category. S. Paul, chairman of Paul Merchants Group, said silver has long played an important role in Indian households as a form of savings and security, while Shaibu Cherian, director of Paul Merchants Finance, said the product could become a trusted option for small-ticket borrowing.
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