India's Gold Loan Market Surges to ₹8.4 Lakh Crore Amid Record Prices
India's gold loan market has surged to ₹8.4 lakh crore as consumers are holding onto their gold rather than selling it, despite record-high prices. This shift in behavior is reflected in a sharp 105% growth in bank gold credit.
The April-June 2026 quarter saw Indian gold recycling fall to its lowest point in nearly three years, with domestic gold prices remaining near record highs. Typically, a price increase encourages households to sell old gold jewelry to cash in on gains.
However, consumers are increasingly choosing to hold their gold or use it as collateral for loans rather than selling it outright. The availability of quick and accessible gold loans allows families to meet urgent cash needs without losing ownership of their assets.
The Reserve Bank of India (RBI) is maintaining strict vigilance over the retail credit space, and any sign of excessive lending standards or a systemic build-up of risk in the gold loan portfolios of banks and non-banking financial companies (NBFCs) could lead to tighter regulatory scrutiny or stricter LTV requirements.