India’s organised gold loan market is racing ahead of expectations and is now projected to touch ₹15 lakh crore in FY26, a full year earlier than previously estimated, according to credit rating agency ICRA. The agency said the sector could expand further to around ₹18 lakh crore by FY27, supported by record-high gold prices and steady growth in borrower demand.
ICRA’s data shows that banks continue to dominate India’s gold loan market, holding 82% of the total share, while non-banking financial companies (NBFCs) make up the rest. The NBFC share, once more robust, has dropped from 22% in March 2021 to below 18% now. Concentration among major NBFCs has also eased, with the top four players accounting for 81% of total NBFC gold loans as of March 2025, down from 90% three years earlier.
“The NBFC gold loan AUM is expected to expand by 30–35% in FY26, aided by high gold prices and slower growth in unsecured loans, which usually cater to the same borrower segment,” said A M Karthik, senior vice president and co-group head of financial sector ratings at ICRA. He added that diversification by lenders and the vast amount of idle gold held by households will continue to support growth.
Gold prices have been setting new records globally and at home. On Tuesday, international prices crossed the $4,000 per ounce mark for the first time, while in India, rates surged past ₹1,22,000 for 10 grams on Wednesday. The rally has directly boosted valuations of gold-backed loans, which are now among the fastest-growing credit products in the country.
As of June 2025, NBFCs’ total gold loan book stood at around ₹2.4 lakh crore, expanding 41% year-on-year, ICRA said. Overall, India’s gold loan market grew at a compound annual growth rate of 26% between FY20 and FY25, touching ₹11.8 lakh crore by March 2025. Banks recorded slightly faster growth than NBFCs during this period, helped by larger customer bases and wider branch networks.
Agriculture and other loans secured by gold jewellery still form the bulk of India’s gold lending portfolio, accounting for more than 70% of all gold loans as of March 2024. However, ICRA noted a clear shift in FY25 as banks tightened eligibility criteria and reclassified some loans under the retail or personal loan category.
As a result, the share of retail and personal gold loans increased to 18% in March 2025 from 11% a year earlier, while the share of agriculture-linked gold loans fell to 63%. During the six-year period from FY20 to FY25, the gold loan tonnage rose only marginally—about 1.7% CAGR—but the average loan ticket size more than doubled, reflecting the sharp jump in gold valuations.
