Mumbai, July 01: Gold loans are becoming one of the fastest-growing forms of borrowing in India. More families are using their gold jewellery and ornaments to access formal credit when they need funds. In FY26, the value of new gold loans grew by 84% compared to the previous year. The total gold loan portfolio also expanded sharply from Rs. 6.3 lakh crore in March 2023 to Rs. 19.4 lakh crore by March 2026.
A major reason for this growth is the increase in gold prices. As gold becomes more valuable, borrowers can get larger loan amounts against the same gold. While the gold price index increased by 144%, (Vs Mar24 base) gold loan sanction amounts Index grew by more than 200% (Vs Mar24 base). As a result, the average loan size nearly doubled from Rs. 0.98 lakh in FY23 to Rs. 1.96 lakh in FY26.
The growth is no longer limited to traditional gold loan markets. Strong expansion is now being seen across several states, including Uttar Pradesh (+138%), West Bengal (+112%), Rajasthan (+105%) and Maharashtra (+102%). This shows that gold-backed borrowing is gaining acceptance across a wider range of cities, towns and semi-urban areas, although these regions currently account for a relatively smaller share of the overall portfolio, indicating further headroom for growth.
Gold loans are also helping more people enter the formal financial system. Priority Sector Gold Loans (PSGL) accounted for around 23% of total gold loan sourcing value in FY26, supporting access to credit in rural and semi-urban communities. Borrowing behaviour is also changing, with nearly 75% of sourced gold loan customers in Q4 FY26 being repeat borrowers, indicating growing trust in gold loans as a recurring source of finance.
Despite rapid growth, repayment performance has remained strong. Net 90+ delinquency improved from 0.4% in March 2023 to 0.2% in March 2026, showing that expansion in the segment has continued alongside stable credit quality and prudent lending practices. The findings indicate that gold loans are increasingly becoming an important and reliable credit option for households across India.