Gold Loan Market Booms to Rs 18 Trillion as Prices Surge
Gold prices have surged, driving a boom in gold loans. Banks, with an 82% market share, and non-banks are seeing growth, with the stock market projected to reach Rs 18 trillion by FY27.
Gold loans, secured by jewellery, have become a significant part of the lending landscape. Agriculture and other loans accounted for over 70% of gold loans as of March 2024. Retail/personal loans by banks increased from 11% to 18% in a year.
Banks' gold loan books grew faster than non-banks' over the long term, at around 26% compared to 20%. The gold loan size is projected to rise to Rs 18 trillion in FY27. In June 2025, the top four players were three banks and one non-banking company. The compounded annual growth rate of gold loans during FY24-FY25 was about 26%.
Despite gold tonnage growing by only 1.7% annually during FY20-25, loan books increased by 20%. The organized stock market is expected to expand by 30-35% to reach Rs 15 trillion in FY26, with non-bank gold loan books also expected to grow by 30-35% in the same year.
The gold price today has driven significant growth in the gold loan market, which is projected to continue expanding. Banks remain the dominant players, but non-banks are also growing. The stock market is expected to reach Rs 15 trillion in FY26, with non-bank gold loan books also expanding significantly.
