Gold Loans Drive Growth Amid Rising Prices
The gold loan portfolio doubled to Rs 15.6 lakh crore by November 2025, driven by rising gold prices. Lending against gold surged by 42% and comprised 9.7% of retail borrowing portfolios. Growth was mainly in southern states, with Gujarat leading. Males dominate borrowing, though women repay better.
- Country:
- India
A recent report reveals the gold loan portfolio nearly doubled to Rs 15.6 lakh crore by November 2025, spurred by a surge in gold prices prompting lenders to boost their exposure to this secure segment. This development marks a dramatic 42% increase in gold-backed lending over the past year.
The comfort in gold lending has lifted its share in the overall retail borrowing portfolio to 9.7% by the end of November. Rising gold prices have enhanced loan eligibility, with over half of these loans valued above Rs 2.5 lakh. Male borrowers account for 56% of these loans, despite more reliable repayments from females.
State-owned banks command a dominant 60% of the gold loan market share. The rise in the sector was most pronounced in southern states, with Gujarat experiencing the highest growth, followed by Karnataka and Maharashtra. However, stress is mounting in states like Uttar Pradesh, Maharashtra, Tamil Nadu, and Odisha due to higher unpaid loans.
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