ICRA Report: Organised Gold Loan Market Expected to Hit Rs 15 Lakh Crore by March 2026
The organized gold loan market is set to reach an impressive Rs 15 lakh crore by March 2026, a full year ahead of previous estimates, according to a report from Icra, a prominent rating agency. This growth is attributed to banks increasing their market share and expanding more rapidly than non-banking financial companies (NBFCs). The report also forecasts that the market could further grow to Rs 18 lakh crore by FY2027, driven by rising gold prices and a heightened demand for secured credit.
Market Growth and Projections
Icra’s revised forecast highlights a significant shift in the gold loan landscape, primarily fueled by a consistent rise in gold prices, which have reached record highs. The agency had initially projected that the organized gold loan market would hit the Rs 15 lakh crore mark by March 2027. However, the rapid growth observed in the sector has prompted a reassessment of this timeline. As of March 2025, the total assets under management (AUM) in the gold loan sector stood at Rs 11.8 lakh crore, reflecting an annual growth rate of approximately 26% between FY2024 and FY2025. This robust growth trajectory indicates a strong demand for gold loans as consumers seek secured credit options amid fluctuating economic conditions.
Banking Sector’s Dominance
The report underscores the increasing dominance of banks in the gold loan market, which accounted for around 82% of the organized gold loan portfolio as of March 2025. Between FY2020 and FY2025, banks experienced a compounded annual growth rate of nearly 26%, significantly outpacing the 20% growth rate of NBFCs during the same period. This trend suggests that banks are not only solidifying their position in the market but are also adapting their portfolio strategies. Notably, the share of retail and personal gold loans in banks’ total AUM rose to 18% in March 2025, up from 11% the previous year, while the proportion of agriculture and other loans secured by gold decreased to 63%.
Future Outlook for NBFCs
Despite the strong performance of banks, Icra anticipates that NBFCs will also experience substantial growth in the coming year. The agency projects that NBFC gold loan AUM will expand by 30-35% in FY2026, driven by elevated gold prices and a slowdown in the growth of unsecured loan products, which often target similar borrower segments. As of June 2025, the total gold loan AUM for NBFCs was estimated at Rs 2.4 lakh crore, marking a remarkable 41% year-on-year growth. However, the sector remains concentrated, with the top four players accounting for 81% of NBFC gold loans as of March 2025.
Factors Driving Market Expansion
The ongoing expansion of the gold loan market is supported by several key factors. The diversification strategies adopted by lenders and the significant volume of gold holdings among households provide a strong foundation for continued growth. As consumers increasingly turn to gold loans for financial support, the organized segment is expected to thrive. Icra’s report indicates that the combination of rising gold prices and a growing appetite for secured credit will further bolster the market’s expansion in the years to come.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
Follow Us on Twitter, Instagram, Facebook, & LinkedIn
