Organised Gold Loan Market To Hit ₹15 Lakh Crore By March 2026, Driven By Banks’ Faster Growth: ICRA

New Delhi, Oct 10: The organised gold loan market is likely to reach the Rs 15 lakh crore mark by March 2026, a year earlier than previously anticipated, as banks are significantly strengthening their dominant position and growing faster than their NBFC counterparts, rating agency Icra said.

This accelerated timeline comes just over a year after Icra's September 2024 projection that the market would achieve this milestone by March 2027, it added.

The rating agency now estimates the market size will continue its rapid expansion to Rs 18 lakh crore by FY2027.

"The sharp revision in forecasts is driven primarily by the steady uptrend in gold prices, which have scaled new highs and propelled faster-than-expected growth in the sector.

"The update highlights the intensified momentum in the gold loan space, where banks are strengthening their dominant position and outpacing non-banking financial companies (NBFCs) in growth," it said.

According to the agency, banks have increased their market share to 82 per cent of the overall organised gold loan portfolio as of March 2025.

Icra data shows that banks' gold loan asset under management (AUM) grew at a compounded annual growth rate of around 26 per cent between FY2020 and FY2025, significantly outpacing the 20 per cent growth recorded by NBFCs during the same period.

"The overall gold loan AUM stood at Rs 11.8 lakh as of March 2025, having expanded at a CAGR of about 26 per cent during FY2024-FY2025," the agency said.

It further said banks have also seen a strategic shift in their portfolio composition, with the share of retail/personal gold loans increasing to 18 per cent in March 2025 from 11 per cent a year earlier, while the share of agriculture and other loans secured by gold jewellery declined to 63 per cent from previous levels at above 70 per cent.

"Icra foresees the NBFC Gold Loan AUM to expand by 30-35 per cent in FY2026, considering elevated gold prices and lower growth in the unsecured loan products, which are also generally targeted at the same borrower segments. Further, diversification by players into this space and a sizeable estimated free gold-hold in the country provide visibility for achieving this," said AM Karthik, Senior Vice President and Co-Group Head, Financial Sector Ratings, Icra.

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The NBFC gold loan AUM stood at approximately Rs 2.4 lakh crore as of June 2025, growing by about 41 per cent on a year-on-year basis, it added. The segment remains concentrated among a few players, with the top four accounting for 81 per cent of NBFC gold loans as of March 2025, it noted.

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