 "Banks' gold loan growth more than doubles in April on price surge")
Growth in gold loans by commercial banks rose sharply by 119.6 per cent to Rs 2.23 trillion in April 2025 from Rs 1.02 trillion a year ago, the latest data released by the Reserve Bank of India (RBI) showed. In comparison, gold loan growth stood at 12 per cent year-on-year in April 2024.
The robust growth comes on the back of rising gold prices.
Sequentially, gold loan growth was 6.9 per cent in April 2025 over March 2025.
Gold prices increased by 31.6 per cent to Rs 93,983 per 10 gram in April 2025 from Rs 71,423 per 10 gram in the same month last year, according to data from the India Bullion and Jewellers Association (IBJA).
Due to the sharp rise in gold prices, the average gold loan size has increased to Rs 1.1 lakh–1.2 lakh in recent years, from Rs 60,000–70,000. The same quantity of gold now fetches more credit, with the loan-to-value ratio capped at 75 per cent.
The RBI, in a statement, said growth in retail loans moderated to 14.5 per cent year-on-year in April 2025, compared to 17 per cent a year earlier, primarily due to a slowdown in vehicle loans and credit card outstanding.
Credit card outstanding growth fell to 10.6 per cent year-on-year in April 2025, down from 23 per cent in April 2024. Vehicle loan growth dropped to 8.8 per cent year-on-year in April 2025, compared to 17.2 per cent a year ago.
Credit growth to agriculture and allied activities declined to 9.2 per cent in April 2025 from 19.8 per cent in April 2024.
Credit to industry grew by 6.7 per cent year-on-year in April 2025, compared to 6.9 per cent in the same month last year.
Among major industries, year-on-year growth in credit to engineering, chemicals and chemical products, food processing, infrastructure, and textiles accelerated in April 2025.
Credit growth to the services sector moderated to 11.2 per cent in April 2025 from 19.5 per cent a year ago, largely due to a slowdown in credit to non-banking financial companies (NBFCs). Growth in credit to NBFCs dropped to 2.9 per cent year-on-year in April 2025, from 15.3 per cent in April 2024. Credit growth to the trade and computer software segments remained elevated.
Data released by the RBI also showed that total bank credit growth on a year-on-year basis slightly moderated to 9.8 per cent as on 16 May, compared to 9.9 per cent in the previous fortnight ended 2 May. Deposit growth remained steady at 10 per cent.