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The Indian gold loan market has undergone a remarkable expansion in the past two years, with outstanding loans secured against gold soaring to ₹15.6 lakh crore by November 2025.
This surge reflects not only sustained demand for secured credit but also the influence of rising gold prices and greater lender comfort with gold as robust collateral. Below we examine what is driving this shift, who the key players are, how the boom is reflected across loan sizes, and what risks and opportunities lie ahead.
Gold loans have long been viewed as last‑resort credit for many households. That perception is rapidly changing. The latest CreditScape report by CRIF High Mark shows gold loans as the fastest‑growing segment in retail lending, outstripping both consumption and overall retail credit growth.
The portfolio’s strong rise, nearly double in two years, was driven by a 42 % year‑on‑year increase in lending to November 2025, following a roughly 39 % rise the year before.
At its core, this growth reflects the interplay of higher gold prices and strong collateral values. As gold appreciated, the value of the same jewellery holdings rose significantly, allowing borrowers to access larger loans without pledging additional jewellery. This “wealth effect” on gold holdings translates into higher loan eligibility, drawing borrowers who might otherwise avoid secured credit.
Lenders, particularly public sector banks, have been keen to boost exposure. These institutions now control nearly 60 % of the outstanding gold loan book, underscoring their central role in financing this segment.
Read More - Gold Loans Race Ahead As Banks Shift To Secured Credit
Meanwhile, the number of active gold loan accounts also expanded, though at a more modest 10 % annual rate, indicating that much of the growth in value comes from loan sizes rising rather than a huge jump in new borrowers.
Before we look at some broader implications, here’s a snapshot showing how the gold loan portfolio has expanded and what it represents relative to other credit categories.
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Source: CRIF High Mark CreditScape report
Gold loans increased their share of the retail lending mix from around 8.1 % to 9.7 %, signalling that secured lending via gold is increasingly preferred compared with unsecured personal loans or credit card advances.
The data also show that lenders favour larger loans; those above ₹2.5 lakh now account for a growing share of origination value, rising from 36.4 % in FY 2023 to nearly 60 % in early FY 2026.
This trend suggests that borrowing isn’t limited to emergency micro‑loans anymore: higher‑value credit needs, such as business funding or investment, are also being met through gold as collateral.
The most obvious driver of this growth is gold price inflation. Prices have rallied sharply in recent years, lifting the value of pledged collateral and encouraging both lenders and borrowers to engage more actively in this credit segment. High prices have made gold loans more attractive than unsecured lending, which typically carries higher interest rates and stricter credit checks.
Another factor is the regulatory environment. Structured loan‑to‑value (LTV) norms and clearer risk frameworks have bolstered lender confidence, enabling more predictable exposure to secured lending.
Institutions with more conservative risk appetites, such as public sector banks, are thus able to expand their gold loan portfolios with improved asset quality, early delinquency figures remain relatively low compared with broader unsecured segments.
Also Read - How Banks Calculate Amount, LTV Rules And Settlement Explained
However, there are risks. Heavy reliance on gold prices means that any sharp correction could shrink the value of collateral, squeezing borrowers’ eligibility and forcing lenders to tighten terms. Should economic conditions deteriorate, repayment stress could rise, even though recent data suggest relatively low delinquency rates for gold loans so far.
Analysts expect the gold loan segment to continue expanding, with some projections forecasting that the organised gold loan market could reach even higher levels in the coming years. ICRA, for instance, has suggested that the broader market may hit ₹18 lakh crore by FY 2027, driven by elevated gold valuations and persistent demand for secured credit.
This expansion reflects broader shifts in financial behaviour. Gold, long held as a traditional store of value in Indian households, is increasingly deployed as a dynamic financial asset, not just a passive investment. Borrowers are leveraging the tangible security of gold to meet liquidity needs in a cost‑effective way.
