Budget 2026: 4 Big Demands Of Gold Loan NBFCs As Rules Tighten In India

Gold loan NBFCs are heading into Budget 2026 with 3 hard realities. Funding is getting more sentiment-driven, compliance costs are rising, and small-ticket customers still want instant cash flow. The sector wants policy support that lowers borrowers' costs and protects liquidity without diluting guardrails.

Union Budget 2026 is likely to be presented on February 1, 2026, with the Budget Session starting January 28, 2026, as reported by The Economic Times on January 9, 2026. For gold loan NBFCs, the timing is essential. 

Over the last 18 months, the market has watched sudden supervisory action on a large player, tighter scrutiny on cash disbursals, and sharp swings in securitisation appetite. With gold loans widely used by low-income and self-employed borrowers, the next policy moves will decide whether credit remains fast and affordable.

Why Are Gold Loan NBFCs Back In The Budget Spotlight?

The immediate issue is not demand. It is a delivery. Gold loan NBFCs are being pushed to upgrade processes, documentation and disbursal hygiene, while keeping turnaround time tight. In parallel, market funding is sensitive to any negative headline. 

A CRISIL Ratings note dated April 7, 2025, showed securitisation volumes at a record ₹2.35 lakh crore in FY2025, but it also flagged that gold-loan securitisation share fell from ~6% to 2% in FY2025. 

While this does not automatically imply liquidity stress, since securitisation usage also depends on relative funding costs and strategy, the sharp drop does signal that gold loan NBFCs are relying less on this funding channel at a time when market confidence is unusually headline-sensitive. 

Borrower cost is another pressure point, because GST applies to several loan-related charges like processing and foreclosure fees at 18%, as explained by ClearTax (published May 20, 2025).

4 Budget 2026 Moves That Can Actually Help Gold Loan NBFCs

The sector’s asks are clear, and they are not fancy. They are targeted.

First, GST rationalisation on gold-loan service charges can reduce the all-in borrower cost, especially for small tickets where fees pinch. ClearTax notes that processing and foreclosure charges attract 18% GST.

Second, expand refinance lines for last-mile lenders, routed through development finance channels. SIDBI’s annual report web disclosure shows its NBFC portfolio outstanding at ₹64,189 crore in FY2025 versus ₹55,205 crore the previous year, a 16% annual growth. It also says FY2025 disbursements benefited approximately 4.21 lakh MSME customers. This is the cleanest argument for scaling refinance for productive, gold-backed credit.

Third, bring back a credit backstop for pooled assets, designed for transparent, granular gold loan pools. The Government’s PIB release dated August 13, 2019, on the Partial Credit Guarantee scheme spoke of purchases of pooled assets up to ₹1 lakh crore, with a first-loss guarantee of up to 10%. A refreshed, tighter version can unlock bond and securitisation demand.

Fourth, incentivise cashless rails for disbursal and repayment, including assisted digital journeys. Reuters reported on May 8, 2024 that lenders were warned against cash payouts above ₹20,000. Budget support for digital infrastructure reduces friction without slowing disbursals.

How The Story Built Up: Regulation, Funding, And Sentiment

The stress points did not appear overnight. In May 2024, Reuters reported a warning to non-banks on cash loan disbursals beyond ₹20,000, a move likely to curb large cash payouts against gold. 

By August 16, 2024, CRISIL Ratings noted that gold-loan NBFCs were still expected to see “reasonable growth” in disbursements, even after the cash disbursement advisory, pointing to operational resilience.

Then came the market confidence angle. CRISIL’s April 7, 2025, release recorded FY2025 securitisation at ₹2.35 lakh crore (up 24%), but it also highlighted the fall in gold-loan securitisation share from ~6% to 2%.

Policy debate heated up again on May 30, 2025, when Reuters reported the finance ministry seeking relaxations so small borrowers below ₹200,000 are not hit, and suggesting implementation not before January 1, 2026. Reuters also cited a nearly 30% surge in gold loans between September and February as the trigger for tighter proposals.

Industry-facing explainers also tracked how these changes could play out for borrowers going into 2026, including tighter timelines and standardisation.
 

This timeline is why Budget 2026 is being watched closely by gold-loan lenders.

What Stakeholders Want?

The finance ministry’s public position has been to protect small borrowers. Reuters reported the ministry’s line that borrowers below ₹200,000 should be kept out of the tighter rules, and institutions should get time till January 1, 2026, to prepare. Rating agency commentary has focused on execution and compliance. 

CRISIL’s Aug 16, 2024 note underlined resilience even with cash restrictions. Investors, meanwhile, look at securitisation data. The FY2025 fall in gold-loan share to 2% is not a small signal.

Conclusion

Budget 2026 has a clean chance to support gold loan NBFCs without going soft on discipline. Lower borrower friction, stronger refinance, and a pooled-asset backstop can keep credit flowing where it is most needed.