Mumbai: India’s gold loan market is expected to grow rapidly over the next two years and could cross ₹30 lakh crore by March 2028, according to a report by rating agency ICRA.
The market was valued at around ₹18 lakh crore in March 2026. ICRA expects the overall gold loan portfolio to grow at a compound annual growth rate (CAGR) of over 30% between FY27 and FY28. The expansion is likely to be supported by rising demand for loans against gold, a growing customer base and wider branch networks of banks and non-banking financial companies (NBFCs).
NBFCs Expected To Outperform Banks
ICRA believes NBFCs will continue to grow faster than banks in the gold loan segment.
Gold loan assets of NBFCs are expected to record a 35% CAGR during FY27-FY28, while banks are likely to grow at around 30% CAGR. As a result, NBFCs’ share of the gold loan market could increase to 23% by March 2028, although banks are expected to remain the largest players.
Retail Demand Driving Growth
Retail gold loans have been the biggest growth driver in recent years.
NBFCs have traditionally focused on lending against gold jewellery for personal needs and small business requirements. Between FY25 and FY26, the overall gold loan book expanded at nearly 38% CAGR, while growth during FY26 alone reached around 50%.
During the same period, banks recorded 35% growth in their gold loan portfolio, while NBFCs registered a much stronger 54% increase.
Competition And Regulatory Changes
ICRA noted that new lenders, branch expansion and acquisitions are increasing competition in the sector. As more players enter the market, lending rates and profit margins could come under pressure.
The agency also highlighted possible challenges from regulatory changes, including a shift from bullet repayment loans to regular repayment structures and revised loan-to-value (LTV) norms for larger loans. While these changes could temporarily increase defaults, ICRA believes overall credit losses will remain limited because gold is a highly liquid collateral. It advised lenders to strengthen risk management amid rising competition and fluctuations in gold prices.
