Organised Gold Loan Market Projected to Hit ₹15 Lakh Crore by March 2026, Banks Lead Rapid Expansion

Mumbai, 10 October 2025: The organised gold loan market in India is now expected to reach ₹15 lakh crore by March 2026, a year earlier than previously estimated, as banks consolidate their dominance and accelerate lending faster than non-banking financial companies (NBFCs). The upward revision highlights the growing momentum in the sector, driven by elevated gold prices and rising borrower demand.

Banks Strengthen Dominance with 82% Share of Organised Gold Loan Portfolio

Banks continue to lead the organised gold loan market, commanding an 82 per cent share of total assets under management (AUM) as of March 2025. Between FY2020 and FY2025, banks’ gold loan AUM expanded at a compound annual growth rate (CAGR) of 26 per cent, significantly outpacing NBFCs’ 20 per cent CAGR in the same period. The overall organised gold loan AUM reached ₹11.8 lakh crore by March 2025, reflecting strong growth in the retail and institutional segments.

The robust expansion among banks is partly driven by rising gold prices, which encourage higher loan uptake and increased operational efficiency, enabling banks to deploy capital more effectively than NBFCs.

Shift in Loan Composition Signals Growing Retail Appetite

Banks are also witnessing a noticeable change in the composition of gold loans. Retail or personal gold loans rose to 18 per cent in March 2025 from 11 per cent a year earlier, indicating stronger demand from individual borrowers. Conversely, the share of agricultural and other gold-backed loans declined to 63 per cent from above 70 per cent previously, reflecting a strategic reallocation of credit towards higher-margin retail lending.

This shift suggests that banks are increasingly targeting borrowers seeking short-term liquidity, rather than solely relying on traditional agricultural and commercial gold loans.

NBFCs Target Accelerated Growth Amid Rising Gold Prices

Despite banks’ dominance, NBFCs are positioned for strong growth in FY2026, leveraging elevated gold prices and slower expansion in unsecured loan segments. Non-banking lenders are expected to grow their gold loan AUM by 30–35 per cent in FY2026, supported by diversification strategies and a large untapped base of household gold holdings.

As of June 2025, NBFC gold loan AUM stood at ₹2.4 lakh crore, a 41 per cent year-on-year increase, concentrated among the top four players, which accounted for 81 per cent of total NBFC gold loans. The sector’s high concentration enables targeted growth strategies and improved risk management.

Organised Gold Loan Industry Outlook: Rapid Expansion Ahead

With gold prices at record levels and both banks and NBFCs ramping up lending, the organised gold loan market is on track to surpass earlier expectations, potentially reaching ₹18 lakh crore by FY2027. The combination of strong demand, higher loan penetration in retail segments, and institutional expansion positions the industry for sustained growth over the next two years.

The accelerated growth trajectory of the organised gold loan market reflects structural changes in the lending landscape, including a shift towards retail-focused loans and increased market concentration among leading banks and NBFCs. Stakeholders across financial institutions may consider this evolving framework for planning operations, credit strategies, and market participation.

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