NBFC gold loans surge 70% to Rs 3.29 lakh crore as households tap jewellery for credit
Outstanding gold loans provided by non-banking financial companies (NBFCs) surged by 69.9% to Rs 3.29 lakh crore in May 2026, compared to Rs 1.94 lakh crore in May 2025, according to the latest data from the Reserve Bank of India (RBI). This growth far outpaced the 19.5% increase in overall retail loans during the same period.
Over the last two years, gold loan outstandings of NBFCs have jumped by 136%, making them the fastest-growing segment of retail credit. The rise is attributed to high gold prices and increased borrower preference for secured lending. Gold loans now account for 5.6% of all loans by NBFCs, up from 3.5% a year ago.
Manish Jain, Country Managing Director of Experian India, said, “In a country where household gold holdings are significant, the rapid growth of gold loans is enabling households to convert a traditionally held asset into a source of accessible finance. This is supporting greater financial inclusion while enabling consumers to meet a wide range of personal and livelihood needs.”
The growth is broadening across India. While southern states remain key markets, strong sourcing in FY26 was seen in Uttar Pradesh (138% growth), West Bengal (112%), Rajasthan (105%) and Maharashtra (102%), indicating a pan-India expansion. Gold loans are also becoming a gateway to formal credit for more consumers, particularly women-led households and micro-enterprises.
RBI guidelines have imposed strict limits on loan rollovers. Borrowers must repay bullet loans within 12 months, and lenders cannot repeatedly extend tenure without fresh appraisals. Muthoot Finance, the largest NBFC in the segment, reported Rs 1.65 lakh crore in gold loans and held 196 tonnes of gold as security in FY2026.
Separately, commercial real estate credit from NBFCs grew 40.2% year-on-year to Rs 1.196 lakh crore in May 2026, up from Rs 85,317 crore a year ago. This growth has raised concerns among some bankers about risk concentration, as commercial real estate is considered a risky segment alongside unsecured retail and microfinance lending.
