Gold Loan Portfolio Surges 62% to Rs 21.7 Lakh Crore
India's gold loan market sees a massive 62% YoY jump in Q1FY27, reaching Rs 21.7 lakh crore despite a moderation in fresh lending activity.
The gold loan segment has emerged as the fastest-growing engine in India's retail credit market. According to a recent report by JM Financial, the outstanding gold loan portfolio skyrocketed by 62 per cent year-on-year, reaching a massive Rs 21.7 lakh crore as of June 2026.
This surge has significantly increased the footprint of gold-backed credit within the broader lending landscape. In the first quarter of FY27, gold loans accounted for 12.2 per cent of all total retail loans, up from 10.9 per cent in March 2026.
Value-Driven Growth Amidst Moderating Lending
While the total portfolio shows explosive growth, the pace of fresh lending has seen a noticeable cooldown. Gold loan disbursements rose by 31 per cent year-on-year to Rs 8 lakh crore in Q1FY27. However, this is a significant moderation compared to the staggering 122 per cent growth witnessed in the final quarter of the previous financial year (Q4FY26).
On a sequential basis, disbursements actually declined by 27 per cent. Interestingly, the total number of loans issued also saw a slight dip, falling 4 per cent year-on-year to 3.7 crore. This suggests that while fewer people are taking out loans, the value of the loans being issued is much higher.
Rising Ticket Sizes and Gold Price Impact
The growth in the portfolio is being driven almost entirely by value rather than volume. The average ticket size for gold loans jumped 37 per cent year-on-year to approximately Rs 2.17 lakh. This expansion is being fueled by two primary factors:
- Higher Gold Prices: Rising gold rates have boosted the collateral value of pledged gold, allowing for larger loan amounts.
- Increased Loan Values: A shift toward mid-sized and larger-value loans is pushing the total portfolio value upward.
Despite the overall increase in ticket size, there has been a slight shift in the distribution of new loans. The share of high-value loans (above Rs 5 lakh) in the total value of originations dipped to 38.2 per cent from 41.5 per cent in the previous quarter. Conversely, loans in the Rs 1 lakh to Rs 2.5 lakh bracket saw an increase, rising to 24 per cent from 21.7 per cent.
Public Sector Banks Regain Ground
The lending landscape is also seeing a shift in who is providing these loans. Public sector banks have made a strong comeback in the gold loan space. Their share of gold loan originations by value climbed to 49.2 per cent in Q1FY27, a sharp rise from the 40.1 per cent recorded in the preceding quarter.
In contrast, Non-Banking Financial Companies (NBFCs), which previously held a larger piece of the pie, saw their share of originations drop to 27.8 per cent, down from 38 per cent in the previous quarter.
Sectoral Breakdown: Non-Priority Leads the Way
A closer look at the disbursement data reveals a divergence between different sectors:
- Non-Priority Sector: Disbursements in this segment grew by 47 per cent year-on-year, reaching Rs 6.5 lakh crore.
- Priority Sector: In contrast, priority sector gold loan disbursements experienced a 10 per cent decline, falling to Rs 1.6 lakh crore.
The Q1FY27 data paints a picture of a robust but maturing market, where high gold prices continue to support credit expansion, even as the frenzy of fresh lending volumes begins to stabilize.