Gold loans surge 105% in FY26: RBI data, NBFCs lead

Why gold loans are back in focus

Gold loans have become the fastest-growing part of India’s retail credit market, with growth rates that are now reshaping how banks and non-banking finance companies (NBFCs) build their loan books. Latest Reserve Bank of India (RBI) sectoral credit data shows gold loans expanding at a triple-digit pace in the 12 months to May 2026, even as housing loan growth cooled. The RBI’s Financial Stability Report (FSR) adds context on why lenders are seeing stronger demand for gold-backed borrowing and why collateral buffers have improved alongside higher gold prices.

This shift matters because it changes the mix within personal loans, pushes more credit growth into secured products, and highlights NBFCs’ growing role in the distribution of small-ticket secured loans. It also comes at a time when services-sector credit is rising faster than personal loans, led by lending to NBFCs.

RBI’s May 2026 sectoral snapshot: personal loans vs services

In the 12 months up to May 2026, overall personal loan growth slowed relative to services credit. RBI sectoral data showed personal loans rising 15.4% year-on-year (y-o-y) to about Rs 7,020,000 crore as of May 31, 2026. During the same period, housing loan growth slowed to 10.9%, which pulled down the overall pace of personal loans.

Services credit, in contrast, accelerated. Services-sector loans rose 20.4% y-o-y to about Rs 6,050,000 crore and increased their share of total bank credit to 28.1% from 27.5% a year earlier. The expansion in services credit was led by a 33.7% rise in lending to NBFCs, according to the RBI’s sectoral release.

Gold loans jump to Rs 510,000 crore as of May 2026

Loans against gold jewellery rose 105.5% y-o-y to about Rs 510,000 crore as of May 31, 2026, the RBI data showed. That pace sharply outstripped the 15.4% rise in total personal loans. The divergence highlights how quickly gold-backed borrowing has moved from a niche category into a meaningful driver of incremental retail loan growth.

A key takeaway from the RBI data is that gold loans can materially move the retail growth needle even when their outstanding stock remains smaller than big-ticket categories such as housing. Between May 2025 and May 2026, gold loans accounted for nearly 28% of the incremental growth in personal loans.

Gold loans’ share within personal loans has risen sharply

The strong expansion has pushed up gold loans’ share within personal loans to 7.3% in May 2026. That compares with 1.97% in May 2024 and 4.1% in May 2025. Over two years, the share increased by 5.4 percentage points, as per the RBI data cited.

This change in composition is important for lenders because the risk profile and economics of secured lending differ from unsecured products. For borrowers, it reflects a preference for collateral-backed credit at a time when gold prices have enabled larger borrowing against the same quantity of pledged jewellery.

What the RBI Financial Stability Report says is driving demand

In its latest Financial Stability Report released this week, the RBI said gold loans have emerged as the fastest-growing retail loan segment, with rising gold prices supporting disbursements while improving lenders’ collateral buffers. The RBI also said both banks and NBFCs accelerated gold loan disbursements during 2025-26, supported by higher gold prices.

The RBI observed that existing borrowers have been an important driver of the recent increase in gold lending. It noted that borrowers have used higher gold prices to secure larger loans and roll over existing debt. The trend has been more pronounced among NBFCs, where gold loan originations have risen faster than those of banks.

Gold loans are compounding faster than other non-housing retail loans

The RBI’s FSR flagged the longer trend as well. Gold loans recorded a compound annual growth rate (CAGR) of 42.4% since March 2024, nearly double the 23.0% CAGR in overall non-housing retail loans during the same period. The central bank also said gold loans have emerged as the largest segment within non-housing retail loans.

This widening gap suggests that gold loans have shifted from being a seasonal or stress-driven product to a mainstream secured borrowing option for many households and small businesses, at least over the period covered by the RBI’s report.

Experian data: sourcing surges, ticket sizes rise

An Experian report titled Gold Loans in Transition: Market Evolution & Consumer Patterns points to rapid expansion in new gold loan sourcing and a changing borrower mix. Experian said gold loan sourcing value rose 69% in FY25 and accelerated to 84% in FY26. It also reported that gold loans’ share in total retail credit sourcing climbed from 20% in FY24 to 30% in FY25 and reached 41% in FY26.

Experian’s data showed the gold loan market rising to Rs 760,000 crore in FY26 Q4, up 115% y-o-y. Assets under management (AUM) rose 47% annually to Rs 1,190,000 crore as of March 2026. The report also flagged a sharp rise in average ticket size, from Rs 100,000 in FY24 to Rs 170,000 in FY26.

Market share shifts: NBFCs gain, PSBs lose ground

Experian reported that NBFCs increased their market share of retail gold from 28% in FY25 Q4 to 40% in FY26 Q4, while public sector banks’ (PSBs) share fell from 41% to 34%. Separately, CRIF High Mark data also points to NBFC-led expansion, with NBFC originations value rising from 20.7% in Q4 FY24 to 31.6% in Q4 FY26.

In volumes, NBFCs held a 49% share in originations volume as of Q4 FY26, according to CRIF High Mark. Together, these data points indicate that NBFCs are capturing a rising share of new customer acquisition and distribution, even as banks expand their own gold loan portfolios.

Regional concentration: southern states dominate outstanding gold loans

CRIF High Mark data showed that the south Indian region continues to play a dominant role in gold loans. Out of total gold loan outstanding of about Rs 1,860,000 crore (including banks and NBFCs), five southern states - Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala - accounted for Rs 1,394,000 crore as of March 2026.

The report also said gold loans sustained robust portfolio expansion, rising 50.4% y-o-y and 15.0% quarter-on-quarter (q-o-q). It noted that higher collateral values supported growth and that reclassification of agri-gold loans into retail partly contributed. Growth in March 2026 was topped by Karnataka (10.5%) and Telangana (12.8%), followed by Uttar Pradesh (11.2%), as per the same dataset.

Key numbers at a glance

Market impact and what it signals for lenders

The RBI data shows gold loans are now large enough to influence the pace and composition of retail credit growth. With gold loans contributing nearly 28% of incremental personal loan growth between May 2025 and May 2026, lenders’ retail portfolios can tilt toward secured lending even if growth slows in housing loans. The RBI’s FSR framing also matters because it links demand to higher gold prices, which allow borrowers to raise loan amounts against the same pledged gold while improving collateral coverage for lenders.

The mix shift is also visible through NBFCs’ increasing market share in retail gold originations. Experian’s market share estimates and CRIF High Mark’s origination metrics both indicate faster expansion among NBFCs, supported by wider distribution and a product that can be underwritten quickly. At the same time, the RBI’s sectoral data highlights a broader credit rotation, with services credit growing faster than personal loans and NBFC lending within services accelerating.

Another datapoint: RBI numbers capture only part of the market

One data point cited in the provided material notes that RBI personal gold loan figures cover select commercial banks, while NBFCs represent an estimated 45% to 50% of gold loan volume, as per a Macquarie report referenced. The same section also cited an estimate that the actual value of gold loans in India could be around Rs 1,400,000 crore. These estimates underline why the RBI’s banking system snapshot can understate the total gold loan ecosystem when NBFC activity is rising.

Conclusion

Gold loans are expanding far faster than other retail credit categories, with RBI data showing 105.5% y-o-y growth to Rs 510,000 crore by end-May 2026 and a rising share within personal loans. The RBI’s Financial Stability Report links the trend to higher gold prices, repeat borrowing and faster origination growth among NBFCs, while sectoral data also points to strong services credit growth led by lending to NBFCs. With credit bureaus reporting rising sourcing, AUM growth, and a clear shift in market share toward NBFCs, the next set of RBI and bureau releases will be closely watched for whether the pace moderates as base effects rise.