NBFC gold loans rise 66% to ₹3.74 trillion as retail lending picks up pace | Finance News

Outstanding loans against gold jewellery by non-banking financial companies (NBFCs) grew 66.1 per cent year-on-year (YoY) to ₹3.74 trillion in September 2026, making it one of the fastest-growing segments in their retail loan portfolios.

The pace of growth was significantly higher than the 50.7 per cent recorded in September 2025, according to the latest sectoral deployment of credit data released by the Reserve Bank of India (RBI).

In absolute terms, outstanding gold loans increased by nearly ₹1.49 trillion over the one-year period.

The expansion in the segment comes amid elevated gold prices, which have increased the value of collateral and enabled borrowers to raise larger amounts against their jewellery.

The segment’s growth has outpaced that of other major retail loan categories. Overall retail loans by NBFCs grew 21.9 per cent YoY to ₹26.84 trillion in September, compared with 16.8 per cent growth a year ago. Vehicle loans grew 16.1 per cent to ₹6.46 trillion, while housing loans expanded 12.6 per cent to ₹8.7 trillion.

Gold loans accounted for around 14 per cent of NBFCs’ total retail loan portfolio in September, reflecting their growing significance in the sector’s lending mix.

The strong growth, however, has also brought greater attention to the segment’s underwriting practices. Experts have flagged that a portion of gold-loan disbursements was going to borrowers with loans overdue by more than 90 days, suggesting that some customers could be using gold loans to refinance existing obligations.

Piramal Finance’s management had also highlighted that 15-23 per cent of industry gold-loan disbursements were being made to borrowers whose loans were overdue by more than 90 days.

Meanwhile, overall NBFC credit, including HFCs, grew 15.4 per cent YoY to ₹61.7 trillion in September, accelerating from 13.3 per cent growth in the corresponding period last year.

Credit to the services sector increased 17.3 per cent to ₹8.02 trillion, while lending to industry grew at a slower pace of 7.4 per cent to ₹22.69 trillion. Within industry, infrastructure credit expanded 5.9 per cent, compared with 9.4 per cent a year ago.