The agency says assets under management of organized players in the gold loan market—banks and standalone non-banking players—is set to reach the Rs 15 trillion-mark this fiscal itself, a year earlier than previously expected.
The steady uptrend in gold prices, (it is trading at $40,60 per ounce in the international market earlier in the day, is the key reason behind the sharper than envisaged expansion. Subsequently, Icra now estimates the gold loan size to rise to Rs 18 trillion in FY27.
“We see the non-banks gold loan book to expand by 30-35% in FY26, considering elevated gold prices and lower growth in the unsecured loan products, which are also generally targeted at the same borrower segments. Further, diversification into this space and a sizeable estimated free gold-holding in the country provide visibility for achieving this,” said AM Karthik, a senior vice-president at Icra, in a note Wednesday.
Gold loans have expanded at a compounded annual growth of about 26% during FY24-FY25 and stood at Rs 11.8 trillion as of March 2025, with banks showing a slightly higher expansion rate than their non-banking peers.Over the longer term too, during FY20–FY25, the banks’ gold loan books grew faster at around 26% relative to the 20% increase recorded by non-banks, leading to a decline in the share of the latter in the overall organized size.
Overall growth was primarily fuelled by agriculture and other loans secured by gold jewellery, which were extended by banks. The same accounted for more than 70% of the overall gold loans as of March 2024. However, this growth slowed significantly in FY25 as banks imposed stricter eligibility criteria and reclassified some of these loans under the retail/personal category.
Consequently, the share of retail/personal gold loans by banks increased to 18% in March 2025 from 11% in March 2024 and the share of agriculture and other loans secured by gold jewellery declined to 63%. Banks remain the dominant player with 82% market share in overall gold loans with non-banks contributing to the rest which was 22% in March 2021.
Non-banks’ gold loan book stood at about Rs 2.4 trillion as of June 2025, growing by 41%. The top four non-bank players accounted for 81% of the total as of March 2025, lower than 90% as of March 2022.Another significant point to note is the very marginal rise in gold tonnage, which expanded 1.7% annually during FY20-25 vis-à-vis a 20% increase in the loan books during this period, which is to mean that the asset increase in led by rise in gold prices.