Gold loans surge 4.4x, gain share in personal credit amid slower unsecured growth

The latest market report highlights that Gold loans have surged more than fourfold in two years, helped by rising gold prices and a relaxation in Reserve Bank of India norms that allows borrowers to mobilize a larger loan against their jewellery, particularly for smaller-ticket borrowing.

Loans against gold jewellery rose 4.4 times to Rs 5.52 lakh crore in July 2026 from Rs 1.24 lakh crore in July 2024, according to RBI data collated by Moneycontrol. The outstanding amount stood at Rs 2.06 lakh crore in July 2025.

The sharp gain has additionally changed the composition of personal lending.

Gold loans accounted for just 2.2 percent of total personal loans in July 2024. Their share more than doubled to 4.8 percent in July 2025 before climbing further to 7.7 percent in July 2026.

In contrast, the combined share of education, consumer durable and credit-card loans declined from 7.7 percent in July 2024 to 7.4 percent a year later and further to 6.7 percent in July 2026.

South India stays the gold-loan heartland

Despite the rapid expansion across the country, gold-backed borrowing stays heavily concentrated in southern India.

The five southern states of Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala together accounted for more than 70 percent of the outstanding gold-loan portfolio as of June 2026, according to CRIF High Mark's How India Lendsreport.

Tamil Nadu alone accounted for 30 percent of the portfolio, followed by Andhra Pradesh at 15.9 percent and Karnataka at 10.2 percent.

But the geography of expansion is becoming more dispersed.

Uttar Pradesh's gold-loan portfolio expanded 122.8 percent year-on-year as of June, the fastest among the 10 largest states tracked by CRIF. West Bengal recorded expansion of 99.7 percent, Rajasthan 91.2 percent, while Gujarat and Telangana expanded 80.5 percent each. RBI norms provide a lift

Apart from the gain in gold prices, regulatory changes have made smaller gold loans more attractive for borrowers.

The RBI’s new gold and silver collateral framework introduced a tiered loan-to-value, or LTV, structure for consumption loans.

Under the revised rules, lenders can provide loans of up to 85 percent of the value of pledged gold for total borrowing of up to Rs 2.5 lakh. The ceiling is 80 percent for loans above Rs 2.5 lakh and up to Rs 5 lakh, while loans above Rs 5 lakh stay capped at 75 percent.

Banks have additionally stepped up their focus on the segment.

Asked in an August interview around the sharp expansion in Punjab National Bank's gold-loan portfolio, PNB MD and CEO Ashok Chandra stated the bank had previously been a relatively small player in the business.

But clearer RBI guidelines have encouraged the bank to propel the product more actively.

“Bank has started putting forward for the gold loan additionally. We are seeing good expansion happening in the gold loan sector,” Chandra stated.

The other major driver has been the climb in the value of the collateral itself.

Gold futures for October delivery on the Multi Commodity Exchange were trading at Rs 1,52,511 per 10 grams on September 22. Secured lending upside favour

The shift has additionally come as lenders have become more wary around parts of the unsecured retail market.

Unlike credit-card loans and most consumer lending, gold loans are backed by an asset that lenders can liquidate in the event of default.

Asset quality in the segment stays relatively comfortable. CRIF data show that loans overdue by 31-90 days accounted for 0.9 percent of the gold-loan portfolio in June, while another 0.3 percent was in the 91-180 day bucket and 0.2 percent was overdue by more than 180 days.