Gold loan delinquencies at non-banking financial companies (NBFCs) could rise in the near term even as organised gold loans by banks and NBFCs are expected to cross Rs 30 trillion by March 2028 from around Rs 18 trillion in March 2026. As per a recent report by ICRA, the move comes as the borrowers shift from bullet repayment loans to regular monthly instalments under the Reserve Bank of India’s revised norms.
It expects the organised gold loan market to grow at a compound annual growth rate (CAGR) of over 30 per cent during FY27 and FY28.
While the market share of NBFCs is projected to continue to rise to 23% by 2027-28, increasing competitive intensity could exert pressure on their business yields and limit upside.
The overall gold loan book increased at a CAGR of 38% during 2024-25 to 2025-26, with significant growth of about 50% in 2025-26.
During this period, banks expanded their GL book at a CAGR of 35%, while NBFCs saw a higher CAGR of 54%, the ICRA report said.
Consequently, the share of NBFCs in the overall GL assets under management (AUM) rose in 2025-26, after contracting steadily over the previous three years. The share of banks in GL AUM declined to about 78% in March 2026 from 82% in March 2024, while the share of NBFCs rose during the period.
NBFCs are taking initiatives to strengthen their position by enhancing their footprint or acquiring established businesses, providing them with a foundation to build or expand their business in the gold loan space.
The ratings agency cautioned that the shift towards regular repayment loans, higher LTV offerings and other changes could raise near-term delinquencies. However, credit losses shall be limited, considering the liquid nature of the collateral.
Gold Loans Portfolio By Banks, NBFCs To Expand Over 30% By 2027-28: Report
