Gold Loan Market Surges as Indians Tap into Pledged Jewellery
Gold loans have seen rapid growth in India, driven by various factors including rising gold prices and increased availability of secured funding. According to RBI data, gold loan portfolio outstanding reached Rs.22.7 trillion in August 2026, with year-on-year growth rates exceeding 50%.
The increase in gold prices has made it more attractive for people to borrow against their gold jewellery, with the average gold loan increasing from about Rs.1 lakh in 2023-24 to roughly Rs.1.7 lakh in 2025-26. This is also due to the RBI's tiered Loan-to-Value (LTV) ratio of up to 85% for gold loans up to Rs.2.5 lakh, allowing borrowers to secure a bigger loan for the same quantity of gold.
Financial consultant and gold loan expert Pravin Salian notes that while many players have seen an average increase of 50%, some have even registered growth of 100-150% in a year. However, he also points out that the tonnage growth has not been considerable.