India’s Organized Gold Loan Market Set to Reach ₹15 Lakh Crore by March 2026
India’s organized gold loan market is poised for remarkable growth, projected to reach ₹15 lakh crore by March 2026, according to a report by rating agency ICRA. The estimate marks a significant increase from ₹12 lakh crore in 2024 and reflects the growing formalization of the country’s gold-backed lending sector.
The strong growth momentum is driven by rising gold prices, increased participation from banks and non-banking financial companies (NBFCs), and expanding customer acceptance of formal credit against household gold holdings.
Rising Institutional Participation
As per ICRA’s findings, the share of organized gold loan portfolios held by banks has grown to 82%, while NBFCs and microfinance institutions account for the remaining 18%. The report highlights that by March 2027, the total market size could further expand to ₹18 lakh crore, supported by favorable demand and high liquidity.
The report attributes this surge to a combination of factors, including sustained rural demand, high gold prices, and the growing reach of digital lending platforms.
NBFCs to Expand Their Share by 30–35%
Non-Banking Financial Companies (NBFCs) are expected to play a critical role in driving the gold loan industry’s growth over the next two years. Analysts predict that NBFCs’ gold loan assets under management (AUM) could expand by 30–35% annually during FY2025–26.
As of June 2025, NBFCs collectively managed gold loans worth ₹2.4 lakh crore, reflecting a year-on-year growth of 41%. The sector is expected to maintain its upward trajectory, with several companies targeting rural and semi-urban borrowers through technology-based customer engagement and simplified loan disbursement systems.
Banks Increasing Exposure to Gold-Backed Credit
The banking sector has also deepened its involvement in gold-backed lending. The share of gold loans in banks’ total loan portfolios has risen from 16% to nearly 18% over the past year.
However, as banks increase exposure to secured retail credit products like gold loans, their holdings in unsecured loan categories — such as personal and consumer loans — have seen a decline, dropping from 70% to 63% in the same period.
Gold Prices Fueling Credit Growth
The steady rise in gold prices has been a major factor behind the expansion of gold loans. According to market data, gold prices have increased 61% since 2025, reaching record highs amid global economic uncertainty and geopolitical tensions.
A report by Morningstar estimated that Indian households currently hold more than 34,600 tonnes of gold, valued at approximately USD 3.8 trillion (₹126 lakh crore) — the highest recorded in history.
The domestic surge in gold valuation has provided a massive boost to collateralized lending, as more households are leveraging idle gold assets to access credit for business, agriculture, and consumption needs.
Economic Outlook and Demand Dynamics
India is one of the largest consumers and holders of gold globally, and its appetite for gold-backed credit continues to rise. Experts predict that the organized gold loan market will maintain double-digit growth rates well into FY2026–27, supported by:
- Rising household incomes in rural India,
- Expanding financial inclusion, and
- The growing trust in formal credit channels.
ICRA’s report notes that the gold loan market’s integration with fintech platforms has further accelerated accessibility and transparency, bringing millions of new borrowers into the formal financial system.
A Trillion-Dollar Asset Class in the Making
With India’s gold reserves serving as both a cultural and financial asset, analysts believe that the organized gold loan segment could become a trillion-dollar credit ecosystem in the next decade.
As banks, NBFCs, and fintech lenders compete for market share, the sector is likely to see continued innovation in customer experience, collateral management, and digital underwriting — transforming gold from a passive household treasure into an active financial resource fueling India’s economic growth.
