Gold loan companies are advocating for parity with other NBFCs on minimum Tier I capital requirements to reduce their capital costs and expand lending to underserved customers. According to reports from The Hindu BusinessLine, while NBFCs, including GLCs, are required to maintain a regulatory minimum capital to risk-weighted assets ratio (CRAR) of 15 per cent, the minimum Tier I capital requirement varies significantly across different NBFC categories. GLCs currently face a 12 per cent minimum Tier I requirement, while other NBFCs have a 10 per cent requirement. The CEO of a GLC stated there is a need to examine whether current risk weighting and capital requirements for gold loans appropriately reflect the actual collateral and recovery characteristics of the asset.
GLC officials argue that their loans are secured by highly liquid collateral (gold), making them subject to loan-to-value requirements and recovery through liquidation relatively hassle-free. As reported by The Hindu BusinessLine, the industry view is that the differential between gold loan asset requirements and other NBFC categories deserves review. Finance industry expert V Vishwanathan observed that since Tier I is higher within the overall CRAR for GLCs, these companies have to raise their own funds periodically, as retained earnings might not be sufficient to support an expanding gold loan portfolio. He noted that if a level playing field is established, GLCs can strategize to expand their Tier II sources of funding without relying on increasing Tier I alone.
Recent RBI data reveals the strong momentum in gold loan segment, with NBFC retail credit growing 22% year-on-year to ₹26.48 trillion in August 2026, led by a 69.1% surge in gold loans to ₹3.65 trillion. As per The Economic Times, this growth significantly outpaced the overall NBFC credit growth of 15.8% to ₹60.64 trillion, which lagged behind commercial banks' 18.8% growth to ₹223.87 trillion. The data shows that housing loans also contributed with 12.1% growth to ₹8.62 trillion, while consumer durables loans rose by 56.4% to ₹77,784 crore. Retail loans accounted for nearly 44% of the total NBFC lending universe. Meanwhile, lending to the services sector moderated to 16.2% from 24%, largely due to deceleration in trade and transport operator segments.
Recent developments showcase the evolution of gold loan platforms through technology integration. Capital Trust Limited has successfully transitioned from a pilot phase to a structured, technology-driven gold loan platform, scaling from a single pilot branch in October 2025 to six operational gold-tech hubs as of August 2026. The company has implemented an AI Vision system that blind-checks human valuation parameters and operates through a 100% cashless, mobile-first branch stack to minimize cash-handling risks. As per The Hindu BusinessLine, the scaling of secured gold loan platforms helps companies build portfolio resilience and insulate their balance sheets from rural unsecured collection volatility.
