The increased appetite among lenders to lend against gold will see the overall portfolio of such assets touch ₹30 lakh crore by March 2028 from the ₹18 lakh crore in March 2026, a domestic rating agency said on Wednesday.
Non-banking finance companies (NBFCs) will continue to outgrow banks with a 35 per cent jump in assets under management in both the years to increase their share in the overall portfolio outstanding to 23 per cent by end-FY28 from 22 per cent in FY26, Icra Ratings said, adding that increasing competitive intensity could exert pressure on their business yields and limit upside.
NBFCs’ overall gold loan books will expand at a CAGR of 35 per cent during 2026-27 to 2027-28, while that of banks is expected to increase at a CAGR of 30 per cent, it said.
However, credit losses shall be limited, considering the liquid nature of the collateral, it added.
The last two fiscal years ending March 2026 have seen an annual growth of 38 per cent in gold lending, with banks growing their books at 35 per cent and NBFCs at 54 per cent, it said.
“The entry of new players and large NBFCs in the gold lending space — whether organically or through acquisitions — along with their plans to significantly expand their branch networks, supports the strong growth outlook for this segment, particularly amid the stress in unsecured lending in the recent past,” its sector head R Srinivasan said.
The agency said growth was driven by retail GLs of NBFCs and banks, explaining that NBFCs largely focus on retail GLs for consumption or business purposes, and their AUM stood around Rs. 4 lakh crore as of March 2026.
Within banks, retail GLs nearly doubled in 2025-26, while GLs towards agriculture and other end uses grew by about 25 per cent. The sharp rise in retail GLs of banks can be partly attributed to the reclassification of loans to retail from agriculture, etc., apart from the strong demand for fresh loans.
Much of the growth, which the market is witnessing at present, is driven by the elevated gold prices in the market, and the tonnage of the gold pledged for borrowings has not increased by as much, the agency maintained.
The tonnage of gold jewellery held as collateral rose at a modest pace of 3-4 per cent as against the 24 per cent expansion in the loan book of large players during 2021-22 to 2025-26, it said.
Published on July 29, 2026
