Stories
Gold Loans Skyrocket 4.4x, Capturing Personal Credit Share Amidst Slower Unsecured Growth
- •Gold loans surged 4.4 times to Rs 5.52 lakh crore in July 2026 from Rs 1.24 lakh crore in July 2024, driven by rising gold prices and relaxed RBI norms.
- •The share of gold loans in total personal loans more than doubled from 2.2 percent in July 2024 to 7.7 percent in July 2026, while other unsecured loans declined.
- •Southern India, particularly Tamil Nadu, remains the gold-loan heartland, accounting for over 70 percent of the outstanding portfolio as of June 2026.
- •New RBI guidelines introduced a tiered loan-to-value (LTV) structure, allowing up to 85 percent LTV for loans up to Rs 2.5 lakh, making smaller gold loans more attractive.
- •Banks like PNB are actively pushing gold loan products due to clearer RBI guidelines and the inherent security of gold as collateral, leading to good growth in the sector.
Key Questions Answered
Gold loans surged more than fourfold to Rs 5.52 lakh crore in July 2026, driven by soaring gold prices and relaxed Reserve Bank of India norms that permit larger loans against jewellery for smaller-ticket borrowing, alongside a lender shift toward secure collateral-backed credit amid slower unsecured retail growth.
Southern India remains the gold-loan heartland, with Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, and Kerala accounting for over 70 percent of the outstanding gold-loan portfolio as of June 2026. Tamil Nadu alone represents 30 percent, followed by Andhra Pradesh at 15.9 percent and Karnataka at 10.2 percent.
Under the RBI’s tiered collateral framework for consumption loans, lenders can offer up to 85 percent of pledged gold value for total borrowings up to Rs 2.5 lakh. The ceiling is 80 percent for loans between Rs 2.5 lakh and Rs 5 lakh, and 75 percent for loans exceeding Rs 5 lakh.
