An economically viable and ''green'' process has been developed for the synthesis of silver nanoparticles (AgNPs) with an average size of 7 nm using non-toxic and renewable salmalia malabarica gum (SMG) as reducing and capping agent without using any chemical reducing agent. The effect of various parameters such as concentration of SMG and silver nitrate and reaction time for the synthesis of AgNPs was studied. The synthesized AgNPs are systematically characterized by UV/Vis spectroscopy, Fourier transform infrared spectroscopy, X-ray diffraction and Transmission electron microscopy. The resultant SMG-capped AgNPs are highly stable and had significant antibacterial action on both Escherichia coli (E. coli) and Staphylococcus aureus (S. aureus). The catalytic action of the SMG-capped AgNPs to initiate the reduction of 4-nitrophenol (4-NP) in the presence of NaBH 4 has also been reported. The kinetics of the reaction was found to be of pseudo-first-order with respect to the 4-NP.