King gold trounces rivals in retail lending conquest

Gold loans surge on higher prices, narrowing quick loan avenues, RBI move

- Shayan Ghosh

Lenders are shovelling out gold loans as customers juice soaring gold prices, even as barriers rise in personal loans and credit cards.

Banks handed out more gold loans than any other type of retail loan including home loans in FY26, Reserve Bank of India (RBI) data available up to end-July showed. While they disbursed ₹70,675 crore of home loans, the figure for gold loans stood at ₹85,432 crore. The momentum is expected to pick up further, after banks were recently allowed to lend more against the precious metal.

Gold prices rose 23% this fiscal year to touch ₹109,390 per 10 grams on September 12, MCX data showed. When gold prices go up, borrowers can get more loans for the same amount of gold. While some of the increase in gold loans was indeed thanks to higher gold prices, experts said the lack of other easy avenues are driving many customers requiring urgent short-term loans to turn to gold.