Reserve Price Floor:
Under RBI rules effective April 1, 2026, your gold's auction reserve price must not be less than
90%
of its current assessed value.
After 2 Failed Auctions:
The minimum floor may reduce to
85%
— but never below that under any circumstances.
LTV Limits (Apr 2026):
≤₹2.5L → 85% LTV · ₹2.5–5L → 80% LTV · Above ₹5L → 75% LTV.
Valuation:
Based on actual purity + net weight + RBI benchmark price. Stones and gems are excluded from the calculation entirely.
Surplus Refund:
If auction proceeds exceed your total dues, the balance
must
be returned to you by the lender per RBI directions.
The direct answer first: digital gold is legal to buy and sell in India, but as of now it is not regulated by any financial authority. On 8 November 2025, the securities market regulator issued a public caution (SEBI advisory) stating exactly this, and the question of is digital gold regulated in India now has an official answer: no. Three bodies come up whenever this topic is discussed, the securities market regulator, the central bank and the Ministry of Consumer Affairs, and this article explains where digital gold stands with each of them, what risks follow from the gap, and which gold products do carry proper oversight.
What the November 2025 Advisory Said About Digital Gold
The advisory was short and unambiguous. The securities market regulator noted that several online platforms were offering products branded as digital gold or e-gold, marketed as a convenient alternative to physical gold. It then clarified the legal position. These products are not notified as securities. They are not regulated as commodity derivatives either. So they sit entirely outside the regulator's framework.
The practical consequence is what matters for a buyer. Because the products are unregulated, the investor protection machinery of the securities market does not apply. There is no formal grievance redressal channel of the kind regulated investors use. There is no standardised, independently verified custody assurance for the vaulted metal. The buyer's safety rests entirely on the private platform's own practices. That was the regulator's warning, in plain terms: if it is not regulated, it is not protected.
Which Bodies Oversee Gold Investments in India, and Where Digital Gold Falls
India does not lack gold regulation. It lacks regulations for this particular wrapper. Three authorities cover the field, and digital gold slips between all three.
The Securities Market Regulator
This body regulates gold exchange traded funds, exchange-traded commodity derivatives and electronic gold receipts, all of which are legally securities or regulated contracts. Digital gold sebi regulation is the phrase people search for, but the position is that digital gold sold by online platforms is not notified as a security, so it falls outside this regulator's jurisdiction altogether. It supervises the regulated wrappers, not this one.
The Central Bank
The central bank's mandate covers banking, payment systems and foreign exchange. Digital gold is none of these things. It is not a deposit, not a payment instrument and not a foreign exchange product, so it does not fall under the central bank's direct oversight either. The platforms selling it are not licensed as banks or payment banks, and buying gold through an app does not bring the transaction inside the banking rulebook.
The Ministry of Consumer Affairs
General consumer protection law applies to digital gold platforms the way it applies to any seller of goods and services. A buyer who is misled or short-changed can pursue remedies through consumer forums. But that is generic protection. There is no sector-specific rule for digital gold platforms, no licensing requirement, and no authority conducting inspections of their vaults or audits of their holdings.
Put the three together and the summary writes itself: as of the November 2025 advisory, no single authority has issued sector-specific rules for digital gold platforms in India.
The Risks of Holding Unregulated Digital Gold
Unregulated does not automatically mean unsafe, but it does mean the buyer carries risks that regulated investors do not. Four stand out.
- Counterparty risk. The gold is held by a private company on your behalf. If that company fails, defaults or mismanages holdings, there is no compensation fund or statutory safety net behind it.
- Custody risk. There is no mandatory, standardised process verifying that the vaulted gold exists in the stated quantity and purity. You rely on the platform's own audits, where they exist.
- No formal redressal. Disputes cannot be taken to the securities market's grievance mechanisms. Consumer forums remain, but they are slower and general-purpose.
- Exit and pricing risk. Buy-sell spreads, redemption terms and storage charges are set by the platform, with no regulator reviewing whether they are fair.
An industry self-regulatory body, the Digital Precious Metals Assurance Council of India, was formed in May 2026 by major platforms to introduce voluntary standards such as audited 1:1 metal backing. It is a welcome step. It is still not statutory regulation.
Regulated Gold Options to Consider Instead
For buyers who want gold exposure with formal oversight, regulated routes exist within India’s financial framework.
|
Option |
Regulated by |
How it works |
|
Gold ETFs |
Securities market regulator |
Units backed by gold, bought and sold on stock exchanges through a demat account |
|
Electronic Gold Receipts (EGRs) |
Securities market regulator |
Exchange-traded receipts representing vaulted gold, convertible to physical metal |
|
Exchange-traded commodity derivatives |
Securities market regulator |
Regulated gold contracts traded through registered intermediaries |
|
Physical gold with BIS hallmark |
BIS standards for purity |
Jewellery and bank-issued coins carrying the hallmark and HUID |
|
Digital gold |
No financial regulator |
Platform-held vaulted gold; protections depend on the seller |
Note: All figures are indicative. Actual amounts, fees, coverage percentages, and eligibility criteria may vary depending on the lender, borrower profile, loan category, and applicable guidelines at the time of application.
Physical gold has one further practical property the digital form lacks. Hallmarked jewellery and eligible coins may be pledged for a gold loan with regulated lenders, subject to applicable RBI guidelines. Digital gold is generally not accepted as collateral, as current RBI directions recognise only specific forms of physical gold for such lending.
Conclusion
Digital gold occupies an odd position in India: perfectly legal, widely sold, and watched over by no financial regulator. The November 2025 advisory did not ban it. It simply told buyers the truth about where the safety nets end. Anyone who continues to hold digital gold should know their platform's custody, audit and redemption terms in detail, because those terms are the only protection on offer. Anyone seeking gold with oversight has regulated routes in ETFs, EGRs and derivatives, and the oldest route of all, hallmarked physical gold, which carries the additional advantage that a regulated lender can accept it as collateral when the household needs funds.
FAQs
Yes, buying and selling digital gold is legal. However, legal and regulated are different things. The securities market regulator clarified in November 2025 that digital gold is neither a security nor a commodity derivative, so it operates outside any financial regulator's supervision, and buyers carry the associated risks themselves.
No financial regulator supervises digital gold platforms. General consumer protection law applies if a platform misleads or defrauds a customer, and consumer forums can hear such cases, but there is no sector-specific framework, no licensing, and no statutory compensation mechanism for digital gold investors.