What is Girvi? A Complete Guide to Gold Mortgage Loans in India
Girvi (गिरवी) is the long-standing Indian practice of lending money against gold ornaments that a customer pledges as security. It is the backbone of the neighbourhood goldsmith's lending business, and it predates formal banking by centuries.
This guide explains what girvi is, how a pledge works from intake to release, and how goldsmiths track interest and repayments accurately.
How a girvi pledge works
In a girvi transaction the customer hands over a gold ornament and receives a loan against its value. The goldsmith records the item's weight and estimated purity, agrees an amount and a monthly interest rate, and keeps the ornament safely until the loan is repaid.
When the customer repays the principal along with the accrued interest, the ornament is returned. If the loan runs long, interest continues to accrue month by month until settlement.
- Intake: weigh the item, note purity, photograph it, agree the amount and rate.
- Custody: store the pledged item securely and issue the customer a receipt.
- Servicing: track interest as it accrues and record any part-payments.
- Release: on full settlement, return the item and close the loan.
How interest is usually charged
Girvi interest in India is almost always quoted as a monthly percentage rather than an annual one. A rate of two percent per month, for example, means the customer owes two percent of the principal for each month the loan is outstanding.
Because the rate is monthly, keeping the day count and the month rollover correct matters a great deal. A dedicated ledger avoids the disputes that arise from mental maths.
Why goldsmiths move from paper bahi to software
The traditional bahi khata works, but it makes it hard to see which loans are overdue, to prove exactly how interest was calculated, and to find a specific customer's history quickly. A purpose-built ledger keeps every pledge, payment and photo in one searchable place.
Frequently asked questions
What does girvi mean?
Girvi means pledging an asset, usually gold jewellery, as security for a loan. The lender holds the item until the borrower repays the principal and interest.
Is girvi the same as a bank gold loan?
The idea is the same — borrowing against gold — but a goldsmith's girvi is typically faster and more flexible, while a bank gold loan is formally regulated. See our comparison guide for the differences.
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