Winning Bizness Desk

Mumbai. India’s gold loan market has expanded sharply over the past two years, driven by rising gold prices and growing lender interest in the safe-haven segment. The total gold loan portfolio has nearly doubled to Rs 15.6 lakh crore by November 2025, compared with Rs 11 lakh crore in November 2024. Data shows that the trend reflects a mix of higher collateral value, easier credit availability and stronger borrower eligibility as gold prices continue to surge.

Portfolio growth backed by rising gold prices

According to the report, the gold loan portfolio stood at Rs 7.9 lakh crore in November 2023. Since then, the steady rise in gold prices and the comfort of a strong physical guarantee have encouraged banks and other lenders to expand lending. As access to loans against gold became easier, the share of gold loans in the total retail credit portfolio also increased, rising from 8.1 percent a year ago to 9.7 percent by the end of November. Higher gold prices have improved loan-to-value ratios, allowing borrowers to access larger amounts against the same quantity of gold.

Borrower profile and loan size trends change

While the value of loans has risen sharply, the number of active gold loan accounts has grown by only 10.3 percent. This suggests a shift towards larger ticket-size loans. Loans above Rs 2.5 lakh now account for nearly half of all gold loans, compared with 36.4 percent in March 2023. More than 56 percent of gold loans have been taken by male borrowers, pointing to a clear gender skew in borrowing patterns.

Key trends seen in borrower behaviour:

• Preference shifting towards higher-value loans
• Improved eligibility due to rising gold prices
• Limited growth in number of active loan accounts

Public banks dominate lending momentum

Public sector banks continue to play a dominant role in the gold loan market, accounting for around 60 percent of the total portfolio. The pace of lending has been so strong that both the volume and value of loans disbursed in 2024-25 were surpassed within the first eight months of 2025-26 itself. Non-banking financial companies specialising in gold loans hold a smaller share, with 8.1 percent of total outstanding loans.

Asset quality shows visible improvement

The report also highlights an improvement in repayment behaviour. Across all overdue categories, stressed assets have declined by November 2025, indicating better asset quality. This improvement has come despite rapid portfolio growth, suggesting tighter credit assessment and more disciplined repayment by borrowers.

Southern states account for bulk of loans

Nearly three-fourths of the total gold loan portfolio is concentrated in southern states, while the top ten states together account for over 90 percent of outstanding loans. Gujarat recorded the highest growth of 67 percent by November, followed by Karnataka and Maharashtra at around 50 percent each.

States showing higher stress levels include:

• Uttar Pradesh
• Maharashtra
• Tamil Nadu
• Odisha

These states have a relatively higher proportion of stressed gold loan accounts, even as the overall national trend points to improving portfolio health.