Banks are significantly strengthening their gold loan capabilities as demand surges across the sector. According to The Times of India, gold loans have expanded 105% year-on-year in May to about ₹5.2 lakh crore according to RBI data, making it the fastest-growing segment in banking. However, banks report lower growth of around 30% due to classification differences across agriculture, personal and MSME loan categories. The credit bureau CRIF estimates the gold loan market at ₹18.6 lakh crore at end-March 2026, up 50.4%, with NBFCs still maintaining dominance despite banks gaining market share. Latest market developments show gold just posted its best week since February, gaining nearly 7% and reclaiming its 50-day moving average after breaking the downtrend that controlled prices since March.
Union Bank of India is leading the branch-level expansion with its gold loan portfolio growing about 30% annually. As reported by The Times of India, the bank deploys dedicated jewellers at branches handling more than a dozen proposals a day, using weighing equipment, touchstones and acid testing kits to assess jewellery. Branches with lower volumes share appraisers across locations, with customers at its 1,671 gold loan points typically receiving loans within 30 minutes. The bank has also invested in testing equipment and digitised processing to reduce turnaround time.
Indian Bank has identified 725 branches as Gold Shoppe branches with dedicated staff and enhanced customer service facilities. According to The Times of India, the bank has added 982 empanelled appraisers in the past six months, taking the total to 3,538. An Indian Bank official stated the lender has reduced approval time to around 15 minutes through system-driven due diligence, automated validations, digital appraisal, and technology-enabled credit processing. The bank has developed a mobile application for empanelled appraisers that captures appraisal details digitally and integrates with the loan processing system.
Indian Overseas Bank has expanded its panel to 2,910 empanelled gold appraisers and introduced digital valuation controls, digital communication of loan documents and workflow-based monitoring. As reported by The Times of India, IOB MD and CEO Ajay Kumar Srivastava noted that the bank completes gold loan processes within approximately 15 minutes in normal cases. Federal Bank, with a gold loan portfolio of about ₹40,000 crore, has built in-house appraisal capability across its network, with MD and CEO KVS Manian claiming the bank is the largest in gold loans by building appraisal capability.
The latest market data shows Chinese gold ETFs recently attracted money for 14 straight sessions, collecting about $1.2 billion during the streak, indicating the first buyers are returning to the market. According to the World Gold Council's latest survey, 89% of reserve managers expected global official gold holdings to rise over the next year, while a record 45% expected their own institutions to buy more. However, the bond market remains the biggest obstacle as rising inflation-adjusted yields increase the appeal of Treasurys and raise the cost of holding gold. Goldman Sachs estimates commodity trading advisers remain about $9 billion short gold, with potential for a reversal of more than $20 billion if the breakout continues, as the metal needs to hold above $4,000 and the broken downtrend to sustain momentum.
