Gold loans have emerged as the largest segment within non-housing retail loans, growing at a compounded annual growth rate (CAGR) of 42.4 per cent since March 2024 – nearly twice the pace of overall non-housing retail loans (CAGR of 23.0 per cent) during the same period, it said.
Both banks and NBFCs have significantly expanded their gold loan portfolios in 2025–26, outpacing growth in other retail loan categories, including housing loans. This trend has been supported by a sharp increase in gold prices, the report said.
The recent increase in gold loans is driven primarily by existing borrowers, who are using higher gold prices to secure larger loans and roll over existing debt, as indicated by the gap between fresh originations and loan outstanding. This is particularly visible in NBFC loan originations, which have far exceeded those by public and private sector banks, it said.
Gold loans are subject to a loan-to-value (LTV) cap between 75 per cent and 85 per cent based on the amount of gold loan borrowed, RBI said.
Notably, LTV ratios across banks and NBFCs have declined despite strong growth in gold loans, supported by rising gold prices, it added.
This has strengthened collateral buffers and provided lenders with a larger cushion against adverse movements in gold prices, RBI said.
The rapid growth in gold loans has coincided with a moderation in the growth of outstanding personal loans for borrowers who have both personal loans and gold loans. This trend is particularly pronounced among sub-prime borrowers, whose outstanding personal loan balances and loan accounts have declined, the report said.
Overall, while asset impairment risks remain contained and LTV ratios provide a comfortable cushion, the rapid growth in lending against gold collateral amid elevated gold price volatility merits continued vigilance, RBI said.