Using the policy as collateral for a personal loan (or 'charging'/'encumbering' it) is strictly prohibited if you've used GPF money for it. Doing so means the policy is no longer solely secured for the government's benefit.
Source: GPF Rule 27
What if I use the policy as collateral for a personal loan?
Related Questions
What happens if I retire or resign before the full amount is recovered?
What if my alternative payments (like insurance premiums) exactly match or exceed my minimum GPF subscription?
What if my policy gives me a choice to take the bonus now or let it accumulate?
I'm transferring from a Central Government department to a State Government department. Will I get my GPF money?
Can I get my GPF paid to my bank account outside India?
This answer is for informational purposes only and does not constitute legal advice. Always refer to the original rules and consult competent authorities for official interpretation.