The gold loan market is witnessing a significant shift in lender composition, with NBFCs emerging as the fastest-growing category and rapidly gaining market share. According to Experian's latest report titled 'Gold Loans in Transition', NBFCs' market share increased to 44% in Q4FY26 from 33% a year ago, while public sector banks' share declined to 37% in Q4FY26 from 53% over the last six quarters ending March 2026. This represents a fundamental change in the competitive landscape, with NBFCs overtaking public sector banks in sourcing contribution by FY26 Q4. The shift is driven by stronger distribution reach, faster turnaround times, and growing customer preference for non-bank lenders, as reported by The Economic Times. Public sector banks continue to dominate the Priority Sector Gold Loans (PSGL) market with around 88% market share in Q4FY26, leveraging their extensive branch networks and deep rural presence. The market structure is gradually shifting towards private and NBFC-led sourcing, highlighting stronger distribution reach and increasing competitive pressure from agile NBFC lenders.
Gold loans have emerged as one of India's fastest-growing retail credit products, with sourcing surging 84% year-on-year in FY26, outpacing all other segments according to credit information bureau Experian. The report highlights a sharp acceleration in growth momentum, with sourcing value rising to 84% in FY26 from 69% in FY25, reflecting robust demand and deeper market penetration across the country. The growth represents a significant shift in borrowing behavior, with gold loans no longer viewed merely as emergency funding options but increasingly becoming mainstream credit products used by households, small businesses and repeat borrowers across the country. As per Experian's latest report, this segment is scaling rapidly across regions and customer cohorts, with clear evidence that gold loans are becoming an increasingly important gateway to formal credit for a wider spectrum of consumers. The share of gold loans in the retail loan portfolio has more than doubled from 18% in FY23 to 41% in FY26, establishing gold loans as a major driver of India's retail credit growth. Recent data shows gold loan sanction value rose to ₹2.4 trillion in March 2026 from ₹1.4 trillion a year earlier, while personal loan sanctions remained largely stable at around ₹1.1 trillion. The surge in demand helped lenders' outstanding gold loan portfolio expand 49% year-on-year to ₹19.4 lakh crore in FY26, significantly outpacing the overall retail lending market, which grew 17% to ₹170.2 lakh crore during the year. The momentum accelerated in Q4 FY26, with gold loan sourcing reaching ₹11.9 lakh crore, more than double the ₹5.7 lakh crore recorded in the corresponding period a year earlier.
The industry's portfolio has experienced remarkable expansion, growing to ₹19.4 lakh crore by March 2026 from ₹6.3 lakh crore in March 2023, representing more than a tripling of the market size. This growth has been driven by rising gold prices, which have enabled borrowers to unlock higher loan amounts, with the gold price index rising 144% during the period while sanction amounts grew over 200%. The trend is particularly visible in average loan sizes, with the average gold loan ticket size nearly doubling from ₹0.98 lakh in FY22-23 to ₹1.96 lakh in FY25-26, reflecting a growing preference among borrowers to use gold as collateral for larger financing needs. As per Experian's analysis, growth in the gold loan segment is increasingly being driven by larger ticket sizes, stronger borrower demand, broader geographic adoption, and growing participation across banks, NBFCs and specialised gold lenders. The gold loan portfolio is gradually migrating towards higher-value loans—around ₹3 lakh—as the underlying asset becomes more valuable, with the share of loans above ₹3 lakh increasing to 20% in March 2026 from 6% in March 2023. Industry participants expect the growth trend to continue, with the gold loan portfolio projected to rise to around ₹25 lakh crore by FY28. Financial institutions are already expanding their presence to capture the opportunity, with L&T Finance planning to deploy 400 gold loan branches in FY27, while Bajaj Finance aims to increase the share of gold loans in its assets under management to more than 5% from 3.5% currently. Piramal Finance is also set to expand its network with 180 additional gold loan branches during FY27.
The rising gold prices have significantly impacted loan amounts, with average ticket sizes doubling to ₹1.96 lakh in FY26 from ₹0.98 lakh in FY23. Consumer behavior is evolving, with repeat borrowers accounting for around 75% of new sourcing in Q4 FY26, indicating strong customer loyalty and increasing financial needs being met through gold-backed loans. The data shows clear migration toward higher ticket sizes across all tiers, with the over ₹3 lakh segment expanding sharply from FY22-23 to FY25-26, increasing from 45% to 69% in Tier 1, 35% to 61% in Tier 2, 34% to 63% in Tier 3, and 28% to 55% in Tier 4. This indicates that incremental sourcing value is increasingly being driven by larger-ticket loans, supported by higher collateral value and stronger borrower appetite. The report notes changing borrowing patterns, with shorter loan tenures and stronger repeat borrowing behaviour indicating that gold loans are increasingly being used for meeting immediate liquidity requirements and recurring funding needs. Recent data shows the share of loans above ₹3 lakh increased to 20% in March 2026 from 6% in March 2023, while the share of loans below ₹50,000 declined to 20% from 36%. As per Equifax India, existing gold loan customers remain at the heart of this growth, contributing nearly 98% of disbursement value, with almost 80% of new gold loan disbursements coming from borrowers who already hold other credit products such as personal loans or business loans.
Despite the sharp rise in sourcing, asset quality has improved across the industry, with net 30-plus-day delinquency declining to 1% in March 2026 from 2.2% in March 2023, while net 90-plus delinquency fell to 0.2% from 0.4%. Among lender categories, NBFCs saw net 30-plus delinquency improve to 0.6% from 4.2%, while public sector banks recorded a decline to 0.8% from 2.3%. The underlying strength of the segment is reflected in the steady improvement in PAR (31–180), which declined from 2.1% in April 2025 to 1.3% in April 2026. The Reserve Bank of India has moved to tighten oversight of the sector, introducing stricter guidelines in June 2025 governing gold-backed lending. Under the revised framework, lenders can offer a loan-to-value (LTV) ratio of up to 85% for loans of up to ₹2.5 lakh, while loans above ₹5 lakh are subject to an LTV cap of 75%. The guidelines also prescribe stricter computation norms for bullet repayment loans and allow top-up or renewal of gold loans only when the existing loan remains standard and prescribed LTV requirements are met. As per CRIF High Mark, the segment demonstrated remarkable resilience and growth in FY26, with borrowers increasingly treating gold as an active financial asset to unlock liquidity rather than relying on it solely during periods of financial stress.
