Golden Surge: India’s Organised Gold Loan Market to Hit ₹15 Lakh Crore Sooner Than Expected

India’s organised gold loan market is set to achieve a landmark ₹15 lakh crore by March 2026, a full year earlier than initially forecasted, according to rating agency ICRA. This market acceleration is primarily attributed to a sharp rise in gold prices, which have reached unprecedented highs, and banks strengthening their dominant role over non-banking financial companies (NBFCs).

ICRA’s data reveals that banks currently hold an imposing 82% share of the organised gold loan portfolio as of March 2025, having expanded their assets under management (AUM) at a compounded annual growth rate (CAGR) of 26% from FY2020 to FY2025. Meanwhile, NBFCs, constituting the remaining market share, have seen slower growth but remain important players in this sector.

The composition of bank loans is also shifting strategically: retail and personal gold loans rose to an 18% share in March 2025, up from 11% the previous year, while loans against gold jewelry for agriculture and other sectors declined to 63% from over 70%. This signals a growing preference for consumer-oriented lending products.

ICRA further forecasts that NBFC gold loan AUM will grow by 30-35% during FY2026, buoyed by persistent high gold prices and a slowdown in unsecured loan products targeted at similar borrower segments. Additionally, greater diversification by lenders and the large estimated stock of free gold held in Indian households provide a positive growth outlook.

The overall gold loan AUM stood at approximately ₹11.8 lakh crore as of March 2025, reflecting rapid sectoral expansion and increased consumer adoption. The top four NBFC players account for about 81% of the NBFC gold loan market, indicating a moderately concentrated landscape.

Notable Updates

Gold loan market to reach ₹15 lakh crore by March 2026, accelerating previous forecasts.

Banks dominate market with 82% share; growing faster than NBFC competitors.

Bank gold loan AUM grew at CAGR of 26% FY2020-25; NBFCs at 20%.

Retail/personal gold loans gain prominence, agricultural loans decline in share.

NBFC gold loans expected to grow 30-35% in FY2026 amid gold price surge.

Top four NBFCs hold 81% of NBFC gold loan market, reflecting concentrated competition.

Overall gold loan asset under management stood at ₹11.8 lakh crore in March 2025.

The organised gold loan sector’s rapid growth exemplifies India’s increasing reliance on gold-backed credit, supported by evolving consumer needs, rising gold prices, and competitive financial market dynamics.

Sources: ICRA, Economic Times, The Hindu Business Line, Business Today