Despite the tightening of measures by the Reserve Bank of India (RBI), the demand for Gold Loans in the country is showing record growth. The portfolio of gold loans provided by Non-Banking Financial Companies (NBFCs) increased by 69.3 percent year-on-year as of June 2026, reaching 3.41 lakh crore rupees. This figure is three times higher than the growth rate of the entire retail lending segment.
For Indian families, gold stored in safes traditionally remains a reliable support, both in cases of emergency needs and when expanding businesses. Many people consider taking a loan against jewelry to be a simpler way to obtain funds during sudden cash shortages, which drives the rapid growth in demand for gold loans, as evidenced by recent RBI data.
The growth rate of the gold lending business is impressive: the portfolio of unsecured gold loans by NBFCs grew by 69.3% by June 2026, amounting to 3.41 lakh crore rupees. Meanwhile, the overall growth of the retail lending portfolio was only 20.3%, meaning that the growth of gold loans was more than three times higher than other types of loans in the retail lending segment.
Even the tightening of rules by the RBI could not stop this trend. The central bank strengthened norms in the sector after identifying several shortcomings last year. These rules were aimed at increasing transparency in valuation assessment, monitoring LTV, and the auction process. However, despite the imposed restrictions, the demand for gold loans continues to strengthen.
Given the growing customer demand, banks are also actively increasing their presence in the gold loan sector. While NBFC companies advance due to quick application processing, banks are focusing on digitizing processes and ensuring fast approval. For instance, Indian Bank converted 725 branches into special gold loan centers, emphasizing the possibility of approving a gold loan in 15 minutes. Other banks, such as Union Bank and Federal Bank, are also accelerating the development of their gold loan businesses.
The rise in demand is also reflected in the number of valuers working in branches. Indian Bank attracted 982 new valuers in the last six months, bringing the total to 3,538. Furthermore, Indian Overseas Bank expanded its list of partners. Thus, while the growth rates of lending in the industrial and service sectors have slowed down, the demand for gold-backed loans is steadily increasing, confirming that gold in safes remains the most reliable financial safety net for Indian families in difficult times.
