Indian households hold approximately 25,000 to 30,000 tonnes of gold in the form of jewellery and coins, with the total value nearing a whopping $5 trillion, according to a Kotak Institutional Equities research report dated March 18. As reported by Mint, this represents 125% of GDP and has risen sharply in recent months due to steep increases in gold prices. According to Sachin Sawrikar, Founder and Managing Partner of Artha Bharat Investment, divided across 24 crore census households, this works out to about 100-150 grams per household, worth ₹15 to 20 lakh at current prices. The growth in household gold stock value has been particularly significant, with FY25 alone generating an estimated $750 billion in household wealth gains from a 35% rise in gold prices.
Bank lockers offer limited coverage for gold assets stored within them, with the average rent set at ₹5,000 according to RBI rules. As reported by Mint, customers are covered for up to 100 times the locker rent, which equals ₹5,00,000, which is less than the present value of four tola gold. Gibin John, Senior Investment Strategist at Geojit Investments, noted that banks have limited liability for items kept in lockers as they do not evaluate or record the value of contents stored inside them. The RBI explicitly states that banks must not maintain records of locker contents, as only customers know what items are stored or removed.
Jewellery insurance has become increasingly relevant as a protective measure, with premiums generally ranging around 0.5% to 1% of the total insured value annually. According to Ashwini Dubey, Business Head – Home Insurance at Policybazaar.com, replacing stolen or lost jewellery out-of-pocket can be financially devastating for middle-class investors. For investment purposes, experts recommend Gold ETFs and mutual funds as alternatives to physical gold storage, as they eliminate storage risks and provide professional custody with guaranteed purity. Deveya Gaglani from Axis Securities noted that Gold ETFs offer high liquidity and relevant rates compared to physical gold, with ETFs typically carrying total expense ratios under 1% per annum.
Gold overdraft facilities provide an alternative to traditional gold loans, allowing households to pledge jewellery as collateral for revolving credit limits. As reported by Mint, this eliminates storage costs and transfers custodial responsibility to the bank while the family retains ownership. Sawrikar noted that once gold is pledged, the institution becomes responsible for its safekeeping, effectively transferring liability concerns away from the household. This feature is particularly useful for medical emergencies, business cash flow gaps, or education costs, providing accessible liquidity without the emotional cost of disposal.
