Gold loan market in India likely to reach Rs 15 lakh cr by March 2026, here's why

Organised gold loan market in India is forecast to reach ₹15 trillion by March 2026, surpassing previous estimates by a full year, according to credit rating agency ICRA. This expansion is largely fuelled by persistent increase in gold prices, which have peaked at historic highs in recent months.

ICRA further projects the market could grow to ₹18 trillion by the end of FY2027.

"ICRA foresees the NBFC GL AUM to expand by 30-35 per cent in FY2026, considering elevated gold prices and lower growth in the unsecured loan products, which are also generally targeted at the same borrower segments. Further, diversification by players into this space and a sizeable estimated free gold-hold in the country provide visibility for achieving this," said AM Karthik, Senior Vice President and Co-Group Head, Financial Sector Ratings, ICRA Limited.

The growth in the sector has been primarily attributed to higher gold valuations, though the tonnage of gold held as collateral increased at a modest CAGR of 1.7 per cent between FY20 and FY25.

The average loan ticket size has more than doubled during this period, whilst the number of branches has expanded at a slower 3.3 per cent CAGR.

Organised gold loans grew at a compound annual growth rate of about 26 per cent in FY24-FY25, reaching ₹11.8 trillion by March 2025.

Banks now command approximately 82 per cent of the organised market, up from previous years, while the share of non-banking financial companies (NBFCs) has fallen to 18 per cent, down from 22 per cent in March 2021.

As of June 2025, NBFC gold loan assets under management stood at ₹2.4 trillion, reflecting a strong year-on-year uptick of roughly 41 per cent. The NBFC segment remains concentrated, as the top four players account for 81 per cent of market share, though this is a decrease from 90 per cent in March 2022.

"NBFCs focused on GLs maintain their robust lending spread, supported by improving operational efficiencies and moderate credit losses, which sustain their net earnings. Nevertheless, competitive intensity is steadily increasing from new entrants and the ongoing expansion of banks in this segment, resulting in potential yield pressures for market participants. Consequently, continuous enhancement of operating efficiencies will be crucial for these players to build adequate buffers against such yield pressures," Karthik noted.