Gold loans have emerged as the fastest-growing segment for NBFCs, with their share of overall loan books reaching nearly 10% in the September quarter, up from 9.3% in the preceding quarter and 6.23% a year earlier. According to reports from The Hindu BusinessLine, the combined gold loan book of Bajaj Finance, HDB Financial Services, L&T Finance and IIFL Finance stood at nearly ₹1 lakh crore during the quarter ended September 2026, compared with ₹48,831 crore in the year-ago period, reflecting a 98.6% year-on-year growth.
IIFL Finance remained the largest player in the gold loan segment with a gold loan book of ₹65,729 crore, accounting for nearly 53% of its total assets under management of ₹1.24 lakh crore during the quarter. As reported by The Hindu BusinessLine, the share has risen steadily from about 50% in the previous quarter and 38.4% a year earlier. Gold loans at the company grew 90% year-on-year from ₹34,577 crore in the second quarter of FY26. Other lenders also scaled up their gold loan businesses aggressively, with Bajaj Finance, L&T Finance and HDB Financial Services more than doubling their gold loan books over the past year.
According to IIFL Finance Chairperson Nirmal Jain, higher gold prices have increased the borrowing capacity of households and small businesses with gold as collateral, while tighter conditions in unsecured lending and microfinance have prompted many borrowers to shift towards gold loans. As reported by The Hindu BusinessLine, despite geopolitical uncertainties, economic activity remains resilient with improving business sentiment driving demand for credit among small enterprises. L&T Finance MD & CEO Sudipta Roy noted that growth is being driven primarily by rapid branch expansion, adding more than 200 branches this quarter and planning to add another 300 by year-end, taking the total to around 800.
Bajaj Finance gold loan AUM surged 105% year-on-year to ₹24,195 crore in the September quarter from ₹11,789 crore a year earlier, with the portfolio expanding 14.4% sequentially. HDB Financial Services, a relatively new entrant, reported a gold loan book of ₹2,007 crore during the quarter, with gold loans now accounting for 1.6% of its gross AUM of ₹1.24 lakh crore, compared with 0.9% a year ago. The strong expansion comes even as global gold prices have cooled after a sharp rally that saw prices rise by as much as 60% in 2025.
Despite the growth momentum, some lenders are beginning to flag emerging risks in the segment. According to Piramal Finance analyst call, 15-23% of gold loan disbursements across the industry over the past year were reportedly extended to customers who were already more than 90 days past due on another live loan. The company also highlighted rising gold loan penetration, with the share of customers holding an active gold loan elsewhere increasing to more than 35%, from 20-25% two years ago. As noted by CLSA Head of Research Piran Engineer, NBFCs are aggressively lending against gold because of strong demand, with year-on-year gold prices still up despite the moderated rally.
