India’s gold loan market is going through a structural change. From a niche, distressed product, gold loans have now become a mainstream, high-value financing tool used by affluent borrowers. Loans above Rs 5 lakh now account for more than one-third of the total value of new loans. This shows that rich borrowers are pledging household jewelery for business and investment, thereby breaking a cultural taboo. Let us also tell you which figures are confirming this.
Gold loan more than Rs 5 lakh
Data published by Crif High Mark showed that the share of loans above Rs 5 lakh more than doubled to 36.5 per cent by the end of December 2025 from 17.7 per cent two years ago. In the third quarter of this financial year, the share of gold loans in the Rs 2.5-5 lakh band increased from 23 percent in the previous three-month period to 27.2 percent. Loans below Rs 1 lakh accounted for 12.3 per cent of the origination value, down from 25.4 per cent two years ago. The credit bureau said this reflects deeper penetration among wealthy borrowers and greater reliance on high-ticket loans for business and investment.?
Share of gold loan of Rs 3 lakh increased
Experian, another credit score company, said the share of bands with ticket size above Rs 3 lakh increased to 56 per cent in December from 44 per cent a year ago. Gold loans from banks and non-bank lenders have seen the biggest jump in retail loans, which have increased by 44 per cent year-on-year to Rs 16.1 lakh crore. This segment now accounts for 10 percent of India’s retail loan market. Jefferies estimated that the share of domestic gold stock pledged with organized lenders would increase from 7 per cent to 8 per cent in 2023-24.
This growth was largely driven by higher gold prices, which allowed more borrowing against the yellow metal against collateral. Crisil Ratings Director Aparna Kirubakaran said in a media report that the shift in demand for gold loans from unsecured credit and recent regulatory developments, which allow higher loan-to-value norms and flexibility to expand branch networks, will further support growth prospects.
UP is at the forefront in taking gold loan
Crif High Mark said growth was massive across all states, with all major markets seeing double-digit growth year-on-year. Uttar Pradesh led with 68 percent growth, followed by Rajasthan (56 percent) and Telangana (55 percent). Portfolio quality also improved in most states, with Kerala remaining one of the lowest credit risk states. Public sector banks remain the largest contributor to the origination value, although their share declined to 46 percent in the third quarter of this financial year from 51 percent in the second quarter. Meanwhile, non-banking financial companies accounted for almost half of the total origination volume, which was particularly driven by gold-loan focused players.